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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Brookfield Asset Management Ltd | TSX:BAM | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.25 | 0.48% | 52.58 | 52.56 | 52.59 | 53.01 | 52.42 | 52.53 | 126,785 | 18:23:04 |
Investors, analysts and other interested parties can access Brookfield Asset Management's 2008 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 2008 Results conference call can be accessed via webcast on February 13, 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. today announced its results for the year ended December 31, 2008.
Cash Flow From Operations
Cash flow from operations on a comparable basis (i.e., excluding major disposition gains) for the full year was $1.2 billion ($1.98 per share), compared with $1.1 billion ($1.79 per share) reported in 2007, representing an increase of 11% on a per share basis. Cash flow from operations for the fourth quarter on the same basis increased to $241 million ($0.40 per share) from $163 million ($0.25 per share), representing a 48% increase.
Total cash flow from operations, including major disposition gains, was $1.4 billion ($2.33 per share), compared with $1.9 billion ($3.11 per share) on the same basis in 2007, and for the fourth quarter totalled $247 million ($0.41 per share) compared with $575 million ($0.94 per share).
Three months ended Years ended Cash flow from operations December 31 December 31 -------------------- ------------------ US$ millions (except per share amounts) 2008 2007 2008 2007 --------------------------------------------------------------------------- Comparable basis (excluding major disposition gains) $ 241 $ 163 $ 1,214 $ 1,120 - per share 0.40 0.25 1.98 1.79 Total basis (including major disposition gains) $ 247 $ 575 $ 1,423 $ 1,907 - per share 0.41 0.94 2.33 3.11 ---------------------------------------------------------------------------
"Our renewable power and office property businesses both produced strong operating cash flows during the quarter, which led to the overall improvement in operating cash flows. The stable revenue profiles of these businesses should provide us with a strong earnings base for 2009 and beyond," commented Bruce Flatt, Senior Managing Partner of Brookfield Asset Management. "In addition, we continue to bolster our capitalization and liquidity which, at over $3 billion of core liquidity, remains at historically high levels."
Net Income
Net income for 2008 was $649 million ($1.02 per share) compared to $787 million ($1.24 per share) in 2007. Excluding major disposition gains, net income in 2008 was $525 million ($0.81 per share) compared with $349 million ($0.51 per share) on the same basis last year.
Net income in 2007 reflected a large number of disposition gains. In addition, the 2008 results reflect increases in a higher level of non-cash charges, including depreciation on assets purchased in 2007, offset in part by a non-cash tax recovery arising from an increase in the value of our tax assets.
Three months ended Years ended December 31 December 31 ------------------- ------------------ US$ millions (except per share amounts) 2008 2007 2008 2007 --------------------------------------------------------------------------- Net income $ 171 $ 346 $ 649 $ 787 - per share 0.27 0.56 1.02 1.24 ---------------------------------------------------------------------------
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 full 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 May 31, 2009, to shareholders of record as at the close of business on May 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 year ended December 31, 2008 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., 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.
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 harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. The words "continue", "payable", "expect", "intend", derivations thereof and other expressions, including conditional verbs such as "should", 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 and the bolstering of our capitalization and liquidity levels, procedures and assumptions to be used in preparing our pro forma opening balance sheet for our adoption of 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; the company's continued ability to attract institutional partners to its Specialty Investment Funds; 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 Three months ended Years ended (Unaudited) December 31 December 31 US$ millions (except per share ------------------- ------------------ amounts) 2008 2007 2008 2007 --------------------------------------------------------------------------- Fees earned $ 113 $ 92 $ 449 $ 415 Revenues less direct operating costs Commercial properties(1) 388 414 1,862 1,548 Power generation 158 148 886 611 Infrastructure(2) 68 33 196 290 Development and other properties (5) 115 240 418 Specialty funds 49 233 304 370 Investment and other income 212 343 894 1,209 --------------------------------------------------------------------------- 983 1,378 4,831 4,861 Expenses Interest 447 510 1,984 1,786 Other operating costs 160 141 640 464 Current income taxes (47) 28 (7) 68 Non-controlling interests 176 124 791 636 --------------------------------------------------------------------------- Cash flow from operations $ 247 $ 575 $ 1,423 $ 1,907 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Cash flow from operations per common share Diluted $ 0.41 $ 0.94 $ 2.33 $ 3.11 Diluted - excluding major disposition gains $ 0.40 $ 0.25 $ 1.98 $ 1.79 --------------------------------------------------------------------------- --------------------------------------------------------------------------- (1) Commercial properties includes $31 million (2007 - $nil) of dividend income recognized in the first three months of 2008 from Canary Wharf Group which is included in "Investment and Other Income" in the company's consolidated financial statements, which are prepared in accordance with Canadian GAAP (2) Infrastructure includes the results of the company's Chilean transmission operations, which are recorded on a consolidated basis for the first six months of 2007 and on an equity accounted basis in 2008
Notes
Cash flow from operations is reconciled to net income before other items on page 6 of this news release as follows:
Three months ended Years ended (Unaudited) December 31 December 31 -------------------- --------------- US$ millions 2008 2007 2008 2007 -------------------------------------------------------------------------- Net income excluding other items (see page 6) $ 242 $ 569 $ 1,401 $ 1,555 Dividends from equity accounted investments(1) 5 6 22 21 Gain on sale of exchangeable debentures(1) - - - 331 -------------------------------------------------------------------------- Cash flow from operations (per above) $ 247 $ 575 $ 1,423 $ 1,907 -------------------------------------------------------------------------- -------------------------------------------------------------------------- (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 and differ from the company's consolidated financial statements presented in its 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 following consolidated statements of income and including dividends from investments and the gain on the sale of an exchangeable debenture investment. The exchangeable debenture gain would have been included in income prior to the implementation of a change in accounting requirements but, as a result of a transitional provision, has been recorded in shareholders' equity.
UNDERLYING VALUE AND NET INVESTED CAPITAL Underlying Net Invested Capital Value ------------------------------ As at December 31 (Unaudited) (Unaudited) (Unaudited) US$ millions 2008 2008 2007 --------------------------------------------------------------------------- Assets Operating platforms Commercial properties $ 7,798 $ 4,575 $ 4,598 Power generation 6,639 1,215 1,425 Infrastructure 1,004 761 1,645 Development and other properties 3,313 3,334 3,464 Specialty funds 903 870 1,112 Investments 701 702 1,336 Cash and financial assets 1,073 1,073 892 Other assets 2,650 2,568 3,013 --------------------------------------------------------------------------- $ 24,081 $ 15,098 $ 17,485 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Liabilities Corporate borrowings $ 2,284 $ 2,284 $ 2,048 Subsidiary borrowings 733 733 711 Capital securities 1,425 1,425 1,570 Other liabilities 3,267 2,654 3,482 --------------------------------------------------------------------------- 7,709 7,096 7,811 Capitalization Co-investor interests in consolidated operations 3,541 2,214 2,160 Preferred equity 870 870 870 Common equity 11,961 4,918 6,644 --------------------------------------------------------------------------- 16,372 8,002 9,674 --------------------------------------------------------------------------- $ 24,081 $ 15,098 $ 17,485 --------------------------------------------------------------------------- --------------------------------------------------------------------------- UNDERLYING VALUE OF COMMON EQUITY As at December 31, 2008 (unaudited) US$ millions (except per share amounts) Total Per Share --------------------------------------------------------- Common equity - including future tax liability $ 11,961 $ 20.67 Add back: future tax liability 2,220 3.70 --------------------------------------------------------- Common equity - excluding future tax liability $ 14,181 $ 24.37 --------------------------------------------------------- ---------------------------------------------------------
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 "Introduction - Basis of Presentation," which is available on the company's website 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 December 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 Corporation's auditor.
CONSOLIDATED STATEMENTS OF INCOME Three months ended Years ended (Unaudited) December 31 December 31 US$ millions (except per share ---------------------- ------------------- amounts) 2008 2007 2008 2007 --------------------------------------------------------------------------- Total revenues $ 3,006 $ 3,158 $ 12,868 $ 9,343 Fees earned $ 113 $ 92 $ 449 $ 415 Revenues less direct operating costs Commercial properties(1) 388 414 1,862 1,548 Power generation 158 148 886 611 Infrastructure(2) 68 33 196 290 Development and other properties (5) 115 240 418 Specialty funds 49 233 304 370 Investment and other income 207 337 872 857 --------------------------------------------------------------------------- 978 1,372 4,809 4,509 Expenses Interest 447 510 1,984 1,786 Other operating costs 160 141 640 464 Current income taxes (47) 28 (7) 68 Non-controlling interests 176 124 791 636 --------------------------------------------------------------------------- 242 569 1,401 1,555 Other items Depreciation and amortization (355) (294) (1,330) (1,034) Equity accounted losses from investments (12) (4) (46) (72) Revaluation and other items (262) (95) (267) (112) Future income taxes 545 35 461 (88) Non-controlling interests in the foregoing items 13 135 430 538 --------------------------------------------------------------------------- Net income $ 171 $ 346 $ 649 $ 787 --------------------------------------------------------------------------- --------------------------------------------------------------------------- Net income per common share Diluted $ 0.27 $ 0.56 $ 1.02 $ 1.24 Basic $ 0.28 $ 0.57 $ 1.04 $ 1.27 --------------------------------------------------------------------------- --------------------------------------------------------------------------- (1) Commercial properties includes $31 million (2007 - $nil) of dividend income recognized in the first three months of 2008 from Canary Wharf Group which is included in "Investment and Other Income" in the company's consolidated financial statements, which are prepared in accordance with Canadian GAAP (2) Infrastructure includes the results of the company's Chilean transmission operations, which are recorded on a consolidated basis for the first six months of 2007 and on an equity accounted basis in 2008
Note
The consolidated statements of income are prepared on a basis consistent with the company's financial statements presented in its annual report, which are prepared in accordance with Canadian GAAP.
MAJOR DISPOSITION GAINS Cash Flow from Years ended December 31 Operations Net Income ---------------- ---------------- US$ millions (Unaudited) Quarter 2008 2007 2008 2007 --------------------------------------------------------------------------- Core office properties - disposition 3 $ 80 $ - $ 48 $ - Longview sale 4 24 - 15 - Brazil Residential dilution loss 4 (18) - (18) - Private equity - other operations 1 58 - 58 - Core office properties - debt breakage costs 3 - (14) - (8) Banco Brascan joint venture gain 2 - 17 - 17 Brazil exchange seats sale 4 - 168 - 168 Norbord exchangeable debenture 2 65 - 21 - Core office properties - dispositions 1/2/4 - 54 - 32 Sale of Stelco 4 - 231 - 229 Disposition gains included in opening retained earnings(1) 1/2/3 - 331 - - --------------------------------------------------------------------------- $ 209 $ 787 $ 124 $ 438 --------------------------------------------------------------------------- --------------------------------------------------------------------------- (1) As opposed to net income, due to a prescribed change in accounting guidelines
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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