Brookfield Asset Management Announces Operating Cash Flow of $231 Million for First Quarter of 2011
11 Mai 2011 - 2:01PM
Marketwired Canada
Investors, analysts and other interested parties can access Brookfield Asset
Management's 2011 First Quarter Results as well as the Shareholders' Letter,
Supplemental Information on Brookfield's web site under the Investor
Centre/Financial Reports section at www.brookfield.com.
The 2011 First Quarter Results conference call can be accessed via webcast on
May 11, 2011 at 2 p.m. Eastern Time at www.brookfield.com or via teleconference
at 1-800-319-4610 toll free in North America. For overseas calls please dial
1-604-638-5340, at approximately 1:50 p.m. Eastern Time. The teleconference
taped rebroadcast can be accessed at 1-800-319-6413 or 604-638-9010 (Password
2811#).
Brookfield Asset Management Inc. (TSX:BAM.A)(NYSE:BAM)(EURONEXT:BAMA) today
announced its financial results for the quarter ended March 31, 2011. The
financial results are based on International Financial Reporting Standards
("IFRS") unless otherwise noted.
Three months ended March 31
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US$ millions (except per share amounts) 2011 2010
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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
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"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
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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
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$ 28,091 $ 25,907
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Liabilities
Corporate borrowings $ 3,062 $ 2,905
Subsidiary borrowings 885 858
Other liabilities 1,516 1,556
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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
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22,628 20,588
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$ 28,091 $ 25,907
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Intrinsic value per common share
Net tangible asset value $ 31.71 $ 30.96
Asset management franchise value 6.05 6.49
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Intrinsic value $ 37.76 $ 37.45
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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
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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
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1,207 1,037
Expenses
Interest 546 427
Operating costs 115 93
Current income taxes 33 21
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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)
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Net income $ 570 $ 409
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Net income attributable to:
Common shareholders $ 278 $ 164
Non-controlling interests 292 245
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$ 570 $ 409
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Net income per common share
Diluted $ 0.41 $ 0.25
Basic $ 0.42 $ 0.26
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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
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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
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Attributable to common shareholders 228 281
Add: disposition gains recognized in equity under
IFRS 3 85
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Cash flow from operations $ 231 $ 366
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(1) Excludes amounts attributable to non-controlling interests
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