Dividend Information

Dividend Payments
NOTE:  As announced on October 5, 2006 MDS discontinued the payment of a quarterly dividend.  This change which followed the completion of the Company's sale of MDS Diagnostic Services, was part of a number of planned changes to the capital structure in keeping with the practices of MDS' life sciences peers. 

Prior to this change, MDS paid dividends since 1976.  In September 2004, the MDS Board of Directors revised its dividend policy and declared a quarterly cash dividend of $0.0325 per Common Share. The policy was designed to maintain stable and consistent dividends, with a targeted payout ratio of approximately 10%-15% of the previous year's normalized, sustainable earnings per share after consideration of the Company's cash and liquidity position and future cash requirements.

Eligible Dividend Designation
Shareholders who file personal income tax returns in Canada should be aware that certain dividends received after 2005 that are designated as "eligible dividends" under the Income Tax Act of Canada by the paying corporation will be eligible for more favourable treatment for Canadian income tax purposes than normal dividends that are received by them. This designation is made for purposes of the enhanced dividend tax credit according to subsection 89(14) of the Income Tax Act, and for any corresponding provincial legislation. Please consult with your own tax advisor for advice with respect to the income tax consequences to you caused by MDS Inc. is designation of the eligibility of dividends paid on its shares.

2006 Dividends
The summary table contained in the following PDF file indicates MDS Inc.'s designation of the dividends paid in 2006. 

[Download 2006 Eligible Dividend Table]

2007 Dividends
MDS Inc. designated all dividends paid on January 8, 2007 as "eligible dividends" for the purposes of the enhanced dividend tax credit.

And as announced on April 9, 2007, MDS Inc. accepted for purchase and cancellation 22,831,050 Common Shares at a purchase price of C$21.90 per share. For Canadian tax purposes, a deemed dividend of $16.75 per share arose on that share buyback. MDS Inc. designates $16.71 per share as an "eligible dividend" with the remaining $0.04 per share representing a "non-eligible dividend".

Dividend Reinvestment and Share Purchase Plan (DRIP)
As noted above, the discontinuation of the dividend will result in the discontinuance of our Dividend Reinvestment and Cash Share Purchase Plans (DRIP). 

If you would like more information about how this plan will be discontinued and the impact this will have, please visit the CIBC Mellon Trust Company's Website. Alternatively, CIBC can be contacted by telephone at 416.813.4600 or toll-free at 1.800.387.0825.