Investors, analysts and other interested parties can access
Brookfield Asset Management's 2011 First Quarter Results as well as
the Shareholders' Letter, Supplemental Information on Brookfield's
web site under the Investor Centre/Financial Reports section at
www.brookfield.com.
The 2011 First Quarter Results conference call can be accessed
via webcast on May 11, 2011 at 2 p.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 1:50 p.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
quarter ended March 31, 2011. The financial results are based on
International Financial Reporting Standards ("IFRS") unless
otherwise noted.
Three months ended March 31
---------------------------
US$ millions (except per share amounts) 2011 2010
----------------------------------------------------------------------------
Net Income - total $ 570 $ 409
- for common shareholders 278 164
Cash flow from operations - prior to gains $ 218 $ 230
Cash flow from operations 231 366
Net income per share $ 0.41 $ 0.25
Cash flow from operations per share - prior to 0.31 0.37
gains
Cash flow from operations per share 0.33 0.60
----------------------------------------------------------------------------
----------------------------------------------------------------------------
"We continue to integrate the many investments we made over the
past three years and operationally improve returns across our
businesses, and we see strong organic growth opportunities across
the company," commented Bruce Flatt, CEO of Brookfield. "Our
businesses are generating $4 billion of annual cash flow, and we
are well positioned to enhance the performance of our existing
portfolio and make new investments where we see value."
Highlights
-- Operating cash flow, excluding disposition gains was $218 million ($0.31
per share) for the quarter, which is consistent with the $230 million
($0.37 per share) reported on a comparable basis last year.
-- Achieved net income for the first quarter 2011 of $570 million compared
with $409 million last year, of which $278 million ($0.41 per share) was
attributable to Brookfield's common shareholders compared with $164
million ($0.25 per share) last year.
-- Increased the company's interest in General Growth Properties ("GGP") to
approximately 40%.
-- Achieved a total return of $0.75 per share, even though only a portion
of the balance sheet is revalued quarterly.
-- Increased capital under management for clients by $2 billion to $52
billion. Base management fees were $47 million compared to $35 million
in the 2010 quarter.
-- Completed over $8 billion of capital raising initiatives in the first
quarter of 2011, and a further $3 billion since the end of the quarter.
-- Signed 2.9 million square feet of new commercial office leases, with a
further 9.5 million square feet in serious discussions, benefitting from
continued improvement in most of Brookfield's major markets. GGP is now
fully focused on upgrading its leasing profile, rationalizing the
portfolio and refinancing debt on attractive terms.
-- Continued to integrate Brookfield's infrastructure businesses following
the completion of the merger with Prime Infrastructure late last year
and to secure new contracts in the company's rail and port operations.
-- Completed the merger of Brookfield's North American residential
businesses, while the company's Brazilian residential businesses
completed R$466 million of launches and contracted sales of R$638
million, both of which represented substantial increases when compared
to 2010.
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
fair value changes, depreciation and amortization, and 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 attributable to common shareholders in
the Supplemental Information available at www.brookfield.com and on
page 6 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.
Intrinsic Value
The intrinsic value of Brookfield's common equity was $37.76 per
share at March 31, 2011. This includes net tangible asset value of
$31.71 per share and $6.05 per share related to the company's asset
management franchise. Please see page 4 of this release for further
information on the company's intrinsic value.
Dividend Declaration
The Board of Directors declared a dividend of US$0.13 per Class
A Common Share, payable on August 31, 2011, to shareholders of
record as at the close of business on August 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 web site under
Investors/Stock and Dividend Information.
Additional Information
The Letter to Shareholders and the company's Supplemental
Information for the quarter ended March 31, 2011 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.
The attached statements are based primarily on information that
has been extracted from our unaudited financial statements for the
quarter ended March 31, 2011, which have been prepared using the
standards and interpretations currently issued under International
Financial Reporting Standards. The amounts have not been audited
and are not subject to review by Brookfield's external auditor.
Brookfield Asset Management Inc., focused on property, renewable
power and infrastructure assets, has approximately $150 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 previous 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.
For more information, please visit our web site 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," "could," "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 integrate investments and improve returns across our businesses;
our expectation of strong organic growth opportunities across the
company; the amount of annual cash flow generated by our
businesses; our ability to enhance the performance of our existing
portfolio and make new investments and the outcome of the leasing
of 9.5 million square feet of new commercial office space that is
in serious discussion. 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 are 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 INVESTED CAPITAL AND INTRINSIC VALUE
(Unaudited) March 31 December 31
US$ millions (except per share amounts) 2011 2010
----------------------------------------------------------------------
Assets
Operating platforms
Renewable power generation $ 7,685 $ 7,492
Commercial properties 8,842 6,909
Infrastructure 1,920 1,905
Development activities 3,314 3,184
Private equity and finance 2,226 2,155
Cash and financial assets 1,513 1,543
Other assets 724 919
Asset management and other services 1,867 1,800
----------------------------------------------------------------------
$ 28,091 $ 25,907
----------------------------------------------------------------------
----------------------------------------------------------------------
Liabilities
Corporate borrowings $ 3,062 $ 2,905
Subsidiary borrowings 885 858
Other liabilities 1,516 1,556
----------------------------------------------------------------------
5,463 5,319
Capitalization
Capital securities 689 669
Shareholders' equity
Preferred equity 1,893 1,658
Common equity (net tangible asset value) 20,046 18,261
----------------------------------------------------------------------
22,628 20,588
----------------------------------------------------------------------
$ 28,091 $ 25,907
----------------------------------------------------------------------
----------------------------------------------------------------------
Intrinsic value per common share
Net tangible asset value $ 31.71 $ 30.96
Asset management franchise value 6.05 6.49
----------------------------------------------------------------------
Intrinsic value $ 37.76 $ 37.45
----------------------------------------------------------------------
----------------------------------------------------------------------
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 sheets. Common equity on
this basis is referred to as net tangible asset value.
Intrinsic value per common share includes net tangible asset
value as well as the value attributed to the company's asset
management franchise.
Asset management franchise value represents management's
estimate of the value attributable to the company's asset
management activities that is not otherwise included in net
tangible asset value, based on current capital under management,
associated fee arrangements, and potential growth.
Accordingly, the statements above differ from the company's
Consolidated Balance Sheets contained in its quarterly 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
(Unaudited)
Three months ended March 31
US$ millions (except per share amounts) 2011 2010
----------------------------------------------------------------------------
Total revenues $ 3,583 $ 3,031
Asset management and other services 76 71
Revenues less direct operating costs
Renewable power generation 186 239
Commercial properties 310 279
Infrastructure 188 47
Development activities 52 71
Private equity and finance 69 74
Equity accounted income 177 115
Investment and other income 149 141
----------------------------------------------------------------------------
1,207 1,037
Expenses
Interest 546 427
Operating costs 115 93
Current income taxes 33 21
----------------------------------------------------------------------------
Net income prior to other items 513 496
Other items
Fair value changes 282 128
Depreciation and amortization (221) (179)
Deferred income tax (4) (36)
----------------------------------------------------------------------------
Net income $ 570 $ 409
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income attributable to:
Common shareholders $ 278 $ 164
Non-controlling interests 292 245
----------------------------------------------------------------------------
$ 570 $ 409
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income per common share
Diluted $ 0.41 $ 0.25
Basic $ 0.42 $ 0.26
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Notes:
The foregoing table includes the results attributable to
non-controlling interests whereas the corporation's segmented
operating results presented elsewhere do not.
RECONCILIATION OF NET INCOME TO CASH FLOW FROM OPERATIONS
(Unaudited)
Three months ended March 31
US$ millions (except per share amounts) 2011 2010
----------------------------------------------------------------------------
Net income attributable to common shareholders (see
page 5) $ 278 $ 164
Adjust for the following items(1)
Fair value changes (156) (63)
Depreciation and amortization 164 157
Deferred income tax (58) 23
----------------------------------------------------------------------------
Attributable to common shareholders 228 281
Add: disposition gains recognized in equity under
IFRS 3 85
----------------------------------------------------------------------------
Cash flow from operations $ 231 $ 366
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Excludes amounts 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 (416) 369-8246 (416)
363-2856 (FAX) katherine.vyse@brookfield.com www.brookfield.com
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