Brookfield Asset Management Inc. (TSX: BAM.A)(NYSE: BAM)(EURONEXT:
BAMA) -
Investors, analysts and other interested parties can access
Brookfield Asset Management's 2009 Q1 Results as well as the
Shareholders' Letter and Supplemental Information on Brookfield's
web site under the Investor Centre/Financial Reports section at
www.brookfield.com.
The 2009 Results conference call can be accessed via webcast on
May 5, 2009 at 11 a.m. Eastern Time at www.brookfield.com or via
teleconference at 1-800-319-4610 toll free in North America. For
overseas calls please dial 1-604-638-5340, at approximately 10:50
a.m. Eastern Time. The teleconference taped rebroadcast can be
accessed at 1-800-319-6413 or 604-638-9010 (Password 2811).
Brookfield Asset Management Inc. (TSX: BAM.A)(NYSE:
BAM)(EURONEXT: BAMA) today announced its results for the quarter
ended March 31, 2009.
For the three months ended March 31
US$ millions (except per share amounts) 2009 2008
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Cash flow from operations $ 273 $ 443
- per share 0.46 0.72
Net income $ 93 $ 197
- per share 0.15 0.31
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Operating Cash Flow
Cash flow from operations was $273 million ($0.46 per share)
during the quarter. Last year's comparable results were $443
million ($0.72 per share) which included a number of special items
that gave rise to gains, which did not occur to the same extent
this quarter. The company's office property and renewable power
operations were consistent with the same period in 2008, as the
contractual nature of the cash flows largely mitigated the impact
of the economic environment.
"The strength and stability of our renewable power and office
property businesses are a major contributor to our operating
results and asset values. This provides us a strong earnings base
for the balance of 2009 and through 2010," commented Bruce Flatt,
Senior Managing Partner of Brookfield Asset Management. "The high
quality of our office property portfolio, which is 96% occupied,
allows us to generate stable long-duration contracted rental income
streams. In addition, we have contracted more than 75% of our
expected renewable generation for the balance of 2009 and
2010."
Net Income
Net income for the first quarter of 2009 was $93 million ($0.15
per share) compared to $197 million ($0.31 per share) in for the
same period in 2008. Similar to our operating cash flows, the 2008
results reflected the higher level of disposition gains, while the
current period results reflect the impact of the current economic
environment.
For the three months ended March 31
US$ millions (except per share amounts) 2009 2008
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Net income $ 93 $ 197
- per share 0.15 0.31
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Basis of Presentation
This news release and accompanying financial statements make
reference to cash flow from operations on a total and per share
basis. Cash flow from operations is defined as net income excluding
depreciation and amortization, interests of non-controlling
shareholders, future income taxes and other items as described as
such in the consolidated statements of income, and including
dividends and disposition gains that are not otherwise included in
net income. Brookfield uses cash flow from operations to assess its
operating results and the value of its business and believes that
many of its shareholders and analysts also find this measure of
value to them. The company provides the components of cash flow
from operations and a reconciliation between cash flow from
operations and net income with the supplemental information
accompanying this news release. Cash flow from operations is a
non-GAAP measure which does not have any standard meaning
prescribed by GAAP and therefore may not be comparable to similar
measures presented by other companies.
Dividend Declaration
The Board of Directors declared a dividend of US$0.13 per Class
A Common Share, payable on August 31, 2009, to shareholders of
record as at the close of business on August 1, 2009. The Board
also declared all of the regular monthly and quarterly dividends on
its preferred shares.
Information on Brookfield Asset Management's declared share
dividends can be found on the company's web site under Investor
Centre/Stock and Dividend Information.
Additional Information
The Letter to Shareholders and the company's Supplemental
Information for the quarter ended March 31, 2009 contain further
information on the company's strategy, operations and financial
results. Shareholders are encouraged to read these documents, which
are available on the company's web site.
Brookfield Asset Management Inc., is a global asset management
company focused on property, power and infrastructure assets, has
approximately $80 billion of assets under management and is
co-listed on the New York and Toronto Stock Exchanges under the
symbol BAM and on NYSE Euronext under the symbol BAMA. For more
information, please visit our web site at www.brookfield.com.
Please note that Brookfield's audited annual and unaudited
quarterly reports have been filed on Edgar and Sedar and can also
be found in the investor section of our web site at
www.brookfield.com. Hard copies of the annual and quarterly reports
can be obtained free of charge upon request.
Note: This news release contains forward-looking information
within the meaning of Canadian provincial securities laws and
"forward-looking statements" within the meaning of Section 27A of
the U.S. Securities Act of 1933, as amended, Section 21E of the
U.S. Securities Exchange Act of 1934, as amended, "safe harbor"
provisions of the United States Private Securities Litigation
Reform Act of 1995 and in any applicable Canadian securities
regulations. The words "stable", "allows", "contracted",
"expected", "intend", "provides", derivations thereof and other
expressions that are predictions of or indicate future events,
trends or prospects and which do not relate to historical matters
identify forward-looking statements. Forward-looking statements in
this news release include statements in regards to the strength of
our future earnings base for the balance of 2009 and 2010, our
ability to generate stable long duration contracted rental income
streams, our contracted renewable generation, our expected
renewable generation for the balance of 2009 and 2010, procedures
and assumptions that we intend to use in adopting International
Financial Reporting Standards ("IFRS") and date of our first IFRS
reporting period. Although Brookfield Asset Management believes
that its anticipated future results, performance or achievements
expressed or implied of such assets by the forward-looking
statements and information are based upon reasonable assumptions
and expectations, the reader should not place undue reliance on
forward-looking statements and information as such statements and
information involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the company to differ materially from anticipated
future results, performance or achievement expressed or implied by
such forward-looking statements and information.
Factors that could cause actual results to differ materially
from those contemplated or implied by forward-looking statements
include: economic and financial conditions in the countries in
which we do business; the behaviour of financial markets, including
fluctuations in interest and exchange rates; availability of equity
and debt financing; strategic actions including dispositions; the
ability to complete and effectively integrate acquisitions into
existing operations and the ability to attain expected benefits;
tenant renewal rates, availability of new tenants to fill office
property vacancies, tenant bankruptcies, adverse hydrology
conditions; regulatory and political factors within the countries
in which the company operates; acts of God, such as earthquakes and
hurricanes; the possible impact of international conflicts and
other developments including terrorist acts; changes in accounting
policies to be adopted under IFRS and other risks and factors
detailed from time to time in the company's form 40-F filed with
the Securities and Exchange Commission as well as other documents
filed by the company with the securities regulators in Canada and
the United States including the company's most recent Management's
Discussion and Analysis of Financial Results under the heading
"Business Environment and Risks."
We caution that the foregoing factors that may affect future
results is not exhaustive. When relying on our forward-looking
statements to make decisions with respect to Brookfield Asset
Management, investors and others should carefully consider the
foregoing factors and other uncertainties and potential events.
Except as required by law, the company undertakes no obligation to
publicly update or revise any forward-looking statements or
information, whether written or oral, as a result of new
information, future events or otherwise.
CONSOLIDATED STATEMENTS OF CASH FLOW FROM OPERATIONS
(Unaudited)
For the three months Consolidated Net
ended March 31 ------------------------ -----------------------
US$ millions (except per
share amounts) 2009 2008 2009 2008
--------------------------------------------------------------------------
Fees earned $ 105 $ 114 $ 105 $ 114
Revenues less direct
operating costs
Commercial properties 400 421 167 182
Power generation 239 251 131 148
Infrastructure 40 48 19 28
Development and other
properties 23 64 15 29
Specialty funds 39 104 8 44
Investment and other
income 169 318 127 221
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1,015 1,320 572 766
Expenses
Interest 415 527 72 78
Other operating costs 159 165 157 164
Current income taxes 11 17 - 2
Non-controlling
interests 157 168 70 79
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Cash flow from operations $ 273 $ 443 $ 273 $ 443
--------------------------------------------------------------------------
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Cash flow from operations
per common share -
diluted $ 0.46 $ 0.72 $ 0.46 $ 0.72
--------------------------------------------------------------------------
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Notes
Cash flow from operations is reconciled to net income before other items on
page 6 of this news release as follows:
(Unaudited)
For the three months
ended March 31
US$ millions 2009 2008
--------------------------------------------------------------------------
Net income excluding
other items (see page 6) $ 273 $ 437
Dividends from equity
accounted investments(1) - 6
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Cash flow from operations
(per above) $ 273 $ 443
--------------------------------------------------------------------------
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(1) Included in "Investment and Other Income" in the Statements of Cash
Flow from Operations
The consolidated statements of cash flow from operations above
are prepared on a basis that is consistent with Management's
Discussion and Analysis of Financial Results ("MD&A") and
differ from the company's consolidated financial statements
presented in its 2008 Annual Report, which are prepared in
accordance with Canadian generally accepted accounting principles
("GAAP"). Management uses cash flow from operations as a key
measure to evaluate performance and to determine the underlying
value of its businesses. Readers are encouraged to consider both
measures in assessing Brookfield Asset Management's results. Cash
flow from operations is equal to net income excluding "other items"
as presented in the consolidated statements of income on page 6 of
this release and including dividends from investments as shown in
the table above.
Net operating cash flow represents the combined operations of
Brookfield Asset Management and Brookfield Properties Corporation
("Brookfield Properties") and is net of carrying charges associated
with related liabilities and cash flows attributable to related
non-controlling interests. Refer to the company's supplemental
information or the MD&A contained in the 2008 Annual Report,
both of which are available at www.brookfield.com.
UNDERLYING VALUE AND NET INVESTED CAPITAL
Net Invested Capital
(Unaudited) Underlying Value ------------------------------
US$ millions December 31, 2008 March 31, 2009 December 31, 2008
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Assets
Operating platforms
Commercial properties $ 7,798 $ 4,391 $ 4,575
Power generation 6,639 1,077 1,215
Infrastructure 974 843 761
Development and other
properties 3,313 3,353 3,334
Specialty funds 903 895 870
Investments 701 707 704
Cash and financial assets 1,073 951 1,073
Other assets 2,650 2,569 2,551
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$ 24,051 $ 14,786 $ 15,083
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----------------------------------------------------------------------------
Liabilities
Corporate borrowings $ 2,284 $ 2,292 $ 2,284
Subsidiary borrowings 733 730 733
Capital securities 1,425 1,385 1,425
Other liabilities 3,267 2,371 2,654
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7,709 6,778 7,096
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Capitalization
Co-investor interests in
consolidated operations 3,541 2,162 2,206
Preferred equity 870 870 870
Common equity 11,931 4,976 4,911
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16,342 8,008 7,987
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$ 24,051 $ 14,786 $ 15,083
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Net invested capital above includes the operations of the
company and Brookfield Properties collectively, and is presented on
a deconsolidated basis meaning that assets are presented net of
associated liabilities and non-controlling interests.
UNDERLYING VALUE OF COMMON EQUITY
As at December 31, 2008 (unaudited)
US$ millions (except per share amounts) Total Per Share
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Common equity - including future tax liability $ 11,931 $ 20.62
Add back: future tax liability 2,220 3.70
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Common equity - excluding future tax liability $ 14,151 $ 24.32
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This news release contains a preliminary analysis of the
underlying value of the company and its common equity, based on the
procedures and assumptions that we expect to follow in preparing
our pro forma opening balance sheet for our adoption of
International Financial Reporting Standards ("IFRS"). Accordingly,
certain assets, such as appraisal surplus relating to inventories
and intangible assets, such as the value of the company's asset
management business, have not been reflected. Please refer to our
Supplemental Information under "Performance Review - Balance Sheet,
Liquidity and Capitalization" which is available on the company's
web site for further information.
This information has been prepared using the standards and
interpretations currently issued and expected to be effective at
the end of our first annual IFRS reporting period, which we intend
to be March 31, 2010. Consequently, in preparing this information,
assumptions have been made about the accounting policies expected
to be adopted. Certain accounting policies expected to be adopted
under IFRS may not be adopted and the application of such policies
to certain transactions or circumstances may be modified and as a
result underlying values are subject to change. Furthermore, the
underlying values have not been audited or subject to a review by
the company's auditor.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the three months ended March 31
US$ millions (except per share amounts) 2009 2008
----------------------------------------------------------------------------
Total revenues $ 2,651 $ 3,210
Fees earned $ 105 $ 114
Revenues less direct operating costs
Commercial properties 400 421
Power generation 239 251
Infrastructure 40 48
Development and other properties 23 64
Specialty funds 39 104
Investment and other income 169 312
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1,015 1,314
Expenses
Interest 415 527
Other operating costs 159 165
Current income taxes 11 17
Non-controlling interests 157 168
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273 437
Other items
Depreciation and amortization (329) (314)
Equity accounted losses from investments - (13)
Revaluation and other items (3) (63)
Future income taxes 2 18
Non-controlling interests in the foregoing items 150 132
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Net income $ 93 $ 197
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Net income per common share
Diluted $ 0.15 $ 0.31
Basic $ 0.15 $ 0.32
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Note
The consolidated statements of income are prepared on a basis consistent
With the company's financial statements presented in its interim report,
which are prepared in accordance with Canadian GAAP.
Contacts: Brookfield Asset Management Denis Couture, SVP,
Investor Relations and Corporate and International Affairs (416)
956-5189 (416) 363-2856 (FAX) Email: dcouture@brookfield.com
Website: www.brookfield.com
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