Investors, analysts and other interested parties can access
Brookfield Asset Management's 2010 Third Quarter Results as well as
the Shareholders' Letter, Financial Review and Supplemental
Information on Brookfield's website under the Investor
Centre/Financial Reports section at www.brookfield.com.
The 2010 Third Quarter Results conference call can be accessed
via webcast on November 5, 2010 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 financial results for the
third quarter ended September 30, 2010. The financial results are
reported under International Financial Reporting Standards ("IFRS")
unless otherwise noted.
Cash Flow From Operations
Cash flow from operations for the third quarter increased to
$354 million ($0.57 per share) from $149 million ($0.24 per share)
in the third quarter of 2009, prior to realization gains. The
operating results benefitted from continued strong performance by
the company's commercial office businesses reflecting high
occupancy levels and improved leasing markets. Operating returns
from infrastructure operations increased due to improving economic
conditions and investment of additional capital at favourable
returns, while lower water levels more than offset the impact of
higher realized prices within the company's power generating
operations.
Three months ended Nine months ended
September 30 September 30
--------------------- -----------------------
2010 2009 2009 2010 2009 2009
US$ millions (except per share
amounts) IFRS IFRS CGAAP IFRS IFRS CGAAP
----------------------------------------------------------------------------
Cash flow from operations
- Total $ 354 $ 495 $ 520 $ 1,047 $ 1,037 $ 1,069
- Prior to realization gains 354 149 179 860 648 675
Cash flow from operations per
share
- Total $ 0.57 $ 0.83 $ 0.88 $ 1.70 $ 1.74 $ 1.80
- Prior to realization gains 0.57 0.24 0.28 1.38 1.07 1.11
----------------------------------------------------------------------------
----------------------------------------------------------------------------
"Recent investments and several major initiatives combined with
organic growth in our existing operations have set the stage for
Brookfield to build on our franchise and continue to create
significant shareholder value," commented Bruce Flatt, CEO of
Brookfield. "We believe that as the global economy continues to
recover, the company is well positioned for long-term, sustainable
growth across all of our sectors."
Net Income
Net income for the third quarter of 2010 was $112 million ($0.16
per share), unchanged from the amounts reported for the same
quarter in 2009 under Canadian Generally Accepted Accounting
Principles ("CGAAP"). Net income for the 2009 quarter, restated to
conform to IFRS, included downward adjustments to the appraisal
values of its commercial office portfolios, resulting in a net loss
for the period. The company's Consolidated Statements of Operations
are presented on page 7 of this release.
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 prior to
depreciation and amortization, revaluation gains or losses, future
income taxes and includes certain disposition gains that are not
otherwise included in net income as determined under IFRS, and
after deducting the associated interests of non-controlling
shareholders. 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 full reconciliation between cash flow from
operations and net income in the Supplemental Information available
at www.brookfield.com and on page 8 of this release. Cash flow from
operations is a non-IFRS measure which does not have any standard
meaning prescribed by IFRS and therefore may not be comparable to
similar measures presented by other companies.
Net Asset Value
The net asset value of Brookfield's common equity was $30.99 per
share at quarter end. Brookfield's renewable power and utility
assets are revalued on an annual basis, so this represents only a
partial update of net asset values. Furthermore, this analysis does
not include any intangible value related to the company's asset
management franchise. Please see pages 5 and 6 of this release for
further information on the company's net asset values.
Dividend Declaration
The Board of Directors declared a dividend of US$0.13 per Class
A Common Share, payable on February 28, 2011, to shareholders of
record as at the close of business on February 1, 2011. 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 website under Investor
Centre/Stock and Dividend Information.
Additional Information
The Letter to Shareholders and the company's Financial Review
and Supplemental Information for the quarter ended September 30,
2010 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
website.
The attached statements are based primarily on information that
has been extracted from our interim financial statements for the
nine months ended September 30, 2010, which have been prepared
using the standards and interpretations currently issued under
International Financial Reporting Standards ("IFRS") and expected
to be effective at the end of our first annual IFRS reporting
period, which is intended to be December 31, 2010. 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. The amounts have not
been audited or subject to review by our external auditor.
Brookfield Asset Management Inc., focused on property, renewable
power and infrastructure assets, has over $100 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 website 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 website at
www.brookfield.com. Hard copies of the annual and quarterly reports
can be obtained free of charge upon request.
For more information, please visit our website at
www.brookfield.com.
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 harbour"
provisions of the United States Private Securities Litigation
Reform Act of 1995 and in any applicable Canadian securities
regulations. The words "continue," "expect," "intend," "believe,"
derivations thereof and other expressions, including conditional
verbs such as "may," "will," "can," "would," and "should," are
predictions of or indicate future events, trends or prospects or
identify forward-looking statements. Forward-looking statements in
this news release include statements with respect to: our ability
to build on our franchise and create significant shareholder value;
our belief of recovery in the global economy and our positioning
for long-term, sustainable growth across all sectors; and
accounting policies adopted under IFRS and the potential
modification of the application thereof. 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;
adverse hydrology conditions; regulatory and political factors
within the countries in which the company operates; availability of
new tenants to fill property vacancies; tenant bankruptcies; 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.
STATEMENTS OF CASH FLOW FROM OPERATIONS
Three months ended Nine months ended
(Unaudited) September 30 September 30
-------------------- --------------------
US$ millions (except per share
amounts) 2010 2009 2010 2009
----------------------------------------------------------------------------
Operating platforms
Renewable power generation $ 46 $ 56 $ 206 $ 279
Commercial properties 83 63 243 189
Infrastructure 37 10 101 37
Development activities 77 (1) 121 9
Private equity and finance 50 5 121 84
Investment and other income 126 84 250 254
----------------------------------------------------------------------------
Total operating platform cash flow 419 217 1,042 852
Asset management and other
services 90 65 239 175
----------------------------------------------------------------------------
Operating cash flow prior to
unallocated costs 509 282 1,281 1,027
Interest expense (76) (70) (225) (194)
Operating costs (66) (70) (178) (186)
Current income taxes (13) 7 (18) 1
----------------------------------------------------------------------------
Operating cash flow - prior to
realization gains 354 149 860 648
Realization gains - 346 187 389
----------------------------------------------------------------------------
Operating cash flow and gains $ 354 $ 495 $ 1,047 $ 1,037
- Per share - prior to
realization gains $ 0.57 $ 0.24 $ 1.38 $ 1.07
- Per share - including
realization gains 0.57 0.83 1.70 1.74
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
Cash flow from operations in this statement is on a segmented
basis and represents the operations of Brookfield Asset Management
net of charges associated with related liabilities and
non-controlling interests. Readers are encouraged to refer to the
company's Financial Review and Supplemental Information which is
available at www.brookfield.com.
The basis of presentation in this statement differs from the
Consolidated Statements of Operations on page 7. A reconciliation
between these two statements is presented on page 8.
The statements of cash flow from operations above are prepared
on a basis that is consistent with the company's Supplemental
Information and differs from net income and loss as presented in
the company's consolidated Statements of Operations on page 7 of
this release, which is prepared in accordance with IFRS. 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.
STATEMENTS OF CHANGES IN NET ASSET VALUE
Three months ended Nine months ended
(Unaudited) September 30, 2010 September 30, 2010
-------------------- --------------------
US$ millions (except per share
amounts) Total Per Share Total Per Share
----------------------------------------------------------------------------
Opening net asset value(1) $ 17,484 $ 29.69 $ 16,706 $ 28.53
----------------------------------------------------------------------------
Operating cash flow 354 0.57 1,047 1.70
Less: realization gains(2) - - (102) (0.19)
Preferred share dividends (18) n/a (53) n/a
Fair value changes
Operating assets 80 0.13 239 0.37
Realization of previously
recognized fair value increases(2) (48) (0.08) (48) (0.08)
Foreign currency 399 0.65 91 0.15
Depreciation and amortization (169) (0.27) (510) (0.83)
Other items (25) (0.06) (114) (0.26)
----------------------------------------------------------------------------
Changes in IFRS carrying values 573 0.94 550 0.86
Changes in values not recognized
under IFRS 300 0.49 1,250 1.99
----------------------------------------------------------------------------
Total return 873 1.43 1,800 2.85
Common share dividends (75) (0.13) (224) (0.39)
----------------------------------------------------------------------------
Total change in value 798 1.30 1,576 2.46
----------------------------------------------------------------------------
Closing net asset value(1) $ 18,282 $ 30.99 $ 18,282 $ 30.99
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Determined on a pre-tax basis.
(2) Represents the portion of disposition gains recorded in cash flow during
the quarter that were previously included in equity as unrealized gains
or appraisal surplus.
STATEMENTS OF INVESTED CAPITAL
Net Invested Capital
------------------------------
(Unaudited) September 30 December 31
US$ millions 2010 2009
----------------------------------------------------------------------------
Assets
Operating platforms
Renewable power generation $ 8,454 $ 8,468
Commercial properties 5,169 4,841
Infrastructure 1,858 1,646
Development activities 3,106 3,153
Private equity and finance 2,664 2,031
Cash and financial assets 2,019 1,645
Other assets 1,103 1,045
Asset management and other services 1,174 1,053
----------------------------------------------------------------------------
$ 25,547 $ 23,882
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Liabilities
Corporate borrowings $ 2,625 $ 2,593
Subsidiary borrowings 857 779
Other liabilities 1,722 2,028
----------------------------------------------------------------------------
5,204 5,400
Capitalization
Capital securities 648 632
Shareholders' equity
Non-controlling interests - -
Preferred equity 1,413 1,144
Common equity 18,282 16,706
----------------------------------------------------------------------------
20,343 18,482
----------------------------------------------------------------------------
$ 25,547 $ 23,882
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
Invested capital in these statements represents the capital
invested by the company in its operations on a segmented basis, net
of the underlying liabilities and non-controlling interests. The
balances are derived from the company's IFRS balance sheets and
adjusted to exclude deferred income taxes and to include
adjustments to reflect the fair value of assets and liabilities
that are carried at historical book values or otherwise not
recognized in the company's IFRS balance sheet.
This analysis does not include any intangible values
attributable to the company's asset management activities.
Accordingly, the statements above differ from the company's
Consolidated Balance Sheets contained in its interim financial
statements, which are prepared in accordance with IFRS. Readers are
encouraged to consider both bases of presentation in assessing
Brookfield Asset Management's financial position and to refer to
the company's Financial Review and Supplemental Information,
available at www.brookfield.com, which contains a full
reconciliation between these two bases of presentation.
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended Nine months ended
(Unaudited) September 30 September 30
-------------------- --------------------
US$ millions (except per share
amounts) 2010 2009 2010 2009
----------------------------------------------------------------------------
Total revenues $ 3,841 $ 2,844 $ 9,666 $ 7,426
Asset management and other
services 90 65 239 175
Revenues less direct operating
costs
Renewable power generation 157 141 560 560
Commercial properties 337 258 916 715
Infrastructure 40 25 145 74
Development activities 176 12 358 76
Private equity and finance 90 18 268 90
Equity accounted income 126 44 362 209
Investment and other income 193 190 508 524
----------------------------------------------------------------------------
1,209 753 3,356 2,423
Expenses
Interest 452 383 1,312 1,085
Operating costs 94 87 296 274
Current income taxes 38 (2) 84 39
----------------------------------------------------------------------------
Net income prior to other items 625 285 1,664 1,025
Other items
Depreciation and amortization (193) (161) (580) (483)
Fair value changes (54) (873) 73 (2,547)
Future income taxes (36) 177 (33) 320
----------------------------------------------------------------------------
Net income (loss) $ 342 $ (572) $ 1,124 $ (1,685)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income (loss) attributable to:
Common shareholders $ 112 $ (417) $ 365 $ (1,051)
Non-controlling interests 230 (155) 759 (634)
----------------------------------------------------------------------------
$ 342 $ (572) $ 1,124 $ (1,685)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income (loss) per common share
Diluted $ 0.16 $ (0.75) $ 0.53 $ (1.89)
Basic $ 0.16 $ (0.75) $ 0.54 $ (1.89)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
The foregoing table includes the results attributable to
non-controlling interests whereas the corporation's segmented
operating results presented elsewhere do not. Please refer to page
8 for further information.
RECONCILIATION OF CASH FLOW FROM OPERATIONS TO NET INCOME
Three months ended September 30
----------------------------------------------
(Unaudited) 2010 2009
---------------------- ----------------------
US$ millions Total(1) Net(2) Total(1) Net(2)
---------------------------------------------------------------------------
Cash flow from operations (as
presented on page 4) n/a $ 354 n/a $ 495
Less: disposition gains
recognized in equity under
IFRS n/a - n/a (346)
---------------------------------------------------------------------------
Net income prior to other
items 625 354 285 149
Depreciation and amortization (193) (169) (161) (142)
Revaluation and other items (54) (64) (873) (591)
Future income taxes (36) (9) 177 167
---------------------------------------------------------------------------
Net income (loss)
attributable to common
shareholders n/a 112 n/a (417)
Non-controlling interests - 230 - (155)
---------------------------------------------------------------------------
Net income (loss) (as
presented on page 7) $ 342 $ 342 $ (572) $ (572)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Nine months ended September 30
----------------------------------------------
(Unaudited) 2010 2009
---------------------- ----------------------
US$ millions Total(1) Net(2) Total(1) Net(2)
----------------------------------------------------------------------------
Cash flow from operations (as
presented on page 4) n/a $ 1,047 n/a $ 1,037
Less: disposition gains
recognized in equity under
IFRS n/a (187) n/a (389)
----------------------------------------------------------------------------
Net income prior to other
items 1,664 860 1,025 648
Depreciation and amortization (580) (510) (483) (423)
Revaluation and other items 73 (6) (2,547) (1,553)
Future income taxes (33) 21 320 277
----------------------------------------------------------------------------
Net income (loss)
attributable to common
shareholders n/a 365 n/a (1,051)
Non-controlling interests - 759 - (634)
----------------------------------------------------------------------------
Net income (loss) (as
presented on page 7) $ 1,124 $ 1,124 $ (1,685) $ (1,685)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Includes share attributable to non-controlling interests.
(2) Excludes share attributable to non-controlling interests.
Contacts: Media: Brookfield Asset Management Inc. Andrew Willis
SVP, Communications & Media (416) 369-8236 (416) 363-2856 (FAX)
andrew.willis@brookfield.com Investors: Brookfield Asset Management
Inc. Katherine Vyse SVP Investor Relations & Communications
(416) 369-8246 (416) 363-2856 (FAX)
katherine.vyse@brookfield.com
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