Brascade Announces 2005 Second Quarter Results.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- Brascade Corporation (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BCA BCA Business Case Analysis BCA Building Code of Australia BCA Boeing Commercial Airplanes BCA Board of Contract Appeals BCA Boston Center for the Arts BCA Billiard Congress of America BCA Bureau of Criminal Apprehension BCA Breast Cancer Action .PR.B) today reported net income for the six months ended June June: see month. 30, 2005 of $505.5 million, compared $109.3 million for the same period last year. Net income for the three months ended June 30, 2005 was $433.1 million compared to $53.8 million in the second quarter of 2004. Results for the current quarter include $359.4 million in gains from the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and partial monetization Monetization The securitization of the gross revenues of a contract. of Brascade's investments in the mining and metals sector. On June 30, 2005, the shareholders of the company's mining and metals affiliate, Noranda Noranda: see Rouyn-Noranda, Que., Canada. Inc., and its subsidiary, Falconbridge Limited, approved the merger of their two companies.The merged company has chosen to continue in business under the name of Falconbridge Limited. Following the reorganization, Brascade owned 44,585,725 or 12% of the outstanding common shares of Falconbridge and $569.2 million of Falconbridge retractable re·tract v. re·tract·ed, re·tract·ing, re·tracts v.tr. 1. To take back; disavow: refused to retract the statement. 2. preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . On August 11, 2005, Brascade received approximately $230 million in proceeds on the redemption by Falconbridge of a portion of its retractable preferred shares. On August 12, 2005, Brascade acquired 29,837,779 common shares of Falconbridge from Brascan Corporation (BNN BNN Boston Neighborhood Network BNN Boundary Network Node (IBM) BNN Back-Propagation Neural Network BNN Biological Neural Network BNN Bart's Neverending Network (public-service TV network in The Netherlands) - NYSE NYSE See: New York Stock Exchange ; BNN.LV.A - TSX), which brings its direct ownership of Falconbridge common shares to 74,423,504 or approximately 20% of the common shares. As consideration for this acquisition, Brascade issued to Brascan approximately 5.5 million junior preferred shares and approximately 21.0 million common shares. Brascan's beneficial ownership of Falconbridge common shares remains unchanged. Mining and metal investments contributed $76.2 million for the first half of 2005, compared with $61.7 million for the same period last year. This improved performance reflects higher metal prices and increased sales volumes in the copper, nickel nickel, metallic chemical element; symbol Ni; at. no. 28; at. wt. 58.69; m.p. about 1,453°C;; b.p. about 2,732°C;; sp. gr. 8.902 at 25°C;; valence 0, +1, +2, +3, or +4. , zinc zinc, metallic chemical element; symbol Zn; at. no. 30; at. wt. 65.38; m.p. 419.58°C;; b.p. 907°C;; sp. gr. 7.133 at 25°C;; valence +2. Zinc is a lustrous bluish-white metal. It is found in Group 12 of the periodic table. and aluminum businesses. Forest product investments contributed $50.1 million for the first half of 2005, compared to $45.1 million for the same period last year. These results reflect an increase in ownership in Norbord Inc. from 22% to 36% and the continued strong performance of the company's investment in the oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. strandboard business ("OSB OSB abbr. Order of Saint Benedict "), partly offset by a reduction in OSB prices from their record levels in 2004. The company's Board of Directors declared the regular quarterly dividends on its Senior Preferred Shares, Series B payable on September 30, 2005 to shareholders of record on September 20, 2005. The company's investments are continuing to benefit from higher metal prices, as well as the productivity improvement taken over the recent years. Brascade Corporation holds investments in the natural resources and property sectors. The common shares of Brascade are wholly owned by Brascan Corporation, an asset management company with a focus on property, power and other infrastructure assets. Edward C. Kress, Chairman and President, will be available at 416-363-9491 to answer any questions on the company's financial results. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. concerning the company's business and operations. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and the company's actual results could differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Information Form for a description of the major risk factors.
Consolidated Statement of Operations
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(unaudited) Three months ended Six months ended
US$ millions, except per June 30 June 30
share amounts 2005 2004 2005 2004
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(Restated - Note 7)
Income
Equity income from
Falconbridge Limited $ 33.6 $ 25.0 $ 76.2 $ 61.7
Equity income from Norbord Inc. 20.9 27.4 51.1 45.1
Equity loss from Fraser Papers
Inc. (2.3) - (1.0) -
Foreign exchange gain (loss) 10.2 (0.5) 15.2 (0.7)
Other income 38.8 1.9 43.3 3.3
Gain on reorganization of
Falconbridge 359.4 - 359.4 -
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460.6 53.8 544.2 109.4
Expenses
Interest expense 27.3 - 38.5 -
Corporate 0.2 - 0.2 0.1
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27.5 - 38.7 0.1
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Net income $ 433.1 $ 53.8 $ 505.5 $ 109.3
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Net income per common share $ 17.32 $ 1.83 $ 20.22 $ 3.72
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Consolidated Statement of Retained Earnings (Deficit)
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Three months ended Six months ended
(unaudited) June 30 June 30
US$ millions 2005 2004 2005 2004
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(Restated - Note 7)
Deficit, beginning of period $ (936.4) $ (79.4) $(1,008.8) $(126.5)
Net income for the period 433.1 53.8 505.5 109.3
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(503.3) (25.6) (503.3) (17.2)
Preferred share dividends - 7.8 - 16.2
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Deficit, end of period $ (503.3) $ (33.4) $ (503.3) $ (33.4)
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Consolidated Balance Sheet
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June 30 December 31
US$ millions 2005 2004
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(unaudited) (Restated - Note 7)
Assets
Loans receivable $ 124.4 $ 102.6
Securities 678.8 103.3
Investment in Falconbridge Limited 610.8 803.8
Investment in Norbord Inc. 174.5 177.3
Investment in Fraser Papers Inc. 206.3 203.8
Investment in Canary Wharf Group, plc 524.8 524.8
Other assets - 8.4
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$ 2,319.6 $ 1,924.0
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Liabilities
Accounts payable $ 162.8 $ 208.9
Term debt (Note 4) 284.6 291.7
Retractable preferred shares (Note 5) 1,860.1 1,865.7
Shareholders'equity
(deficiency) (Note 6) 12.1 (442.3)
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$ 2,319.6 $ 1,924.0
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Consolidated Statement of Cash Flows
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Three months ended Six months ended
(unaudited) June 30 June 30
US$ millions 2005 2004 2005 2004
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(Restated - Note 7)
Cash flow from (used in)
operating activities
Dividend received $ 62.0 $ 8.8 $ 73.6 $ 18.0
Other income, net of expenses 1.1 1.8 (3.2) 3.2
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63.1 10.6 70.4 21.2
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Cash flow used in financing
activities
Preferred share dividend paid - (7.8) - (16.2)
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Cash flow used in investing
activities
Investment in Fraser Papers
common shares (3.5) - (3.5) -
Loans receivable (59.6) (2.8) (66.9) (5.0)
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(63.1) (2.8) (70.4) (5.0)
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Net change and closing cash
balance $ - $ - $ - $ -
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge 1. REORGANIZATION On September 13, 2004, Brascade Resources Inc. ("Brascade Resources") amalgamated a·mal·ga·mate v. a·mal·ga·mat·ed, a·mal·ga·mat·ing, a·mal·ga·mates v.tr. 1. To combine into a unified or integrated whole; unite. See Synonyms at mix. 2. with 4250231 Canada Limited, a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Brascan Corporation ("Brascan"), to form Brascade Corporation (the "company"). At the time of the amalgamation amalgamation /amal·ga·ma·tion/ (ah-mal´gah-ma´shun) trituration (3). amalgamation ( , Brascade Resources owned approximately 25% of the common shares of Noranda Inc. ("Noranda"), 21% of the common shares of Fraser Papers Fraser Papers Inc. TSX: FPS is a Toronto, Ontario, Canada-based manufacturer of specialized printing, publishing, and converting papers, with customers in Canada and the US. It manages more than two million acres (8,000 km²) of forest, operates a tree nursery, and sawmills. Inc. ("Fraser Papers") and 21% of the common shares of Norbord Inc. ("Norbord"), and 4250231 Canada Limited owned approximately 21% of the common shares of Fraser Papers, 21% of the common shares of Norbord and 16% of the ordinary shares of Canary Wharf
Canary Wharf is a large business development in London, located on the Isle of Dogs in the London Borough of Tower Hamlets, centred on the old West India Docks in Group, plc. 4250231 Canada Limited acquired its interests in Fraser Papers and Norbord from Brascan immediately prior to the amalgamation. In conjunction with this amalgamation, Brascan became the sole holder of the company's common shares. The publicly traded Preferred Shares of Brascade Resources, Series B and Series C, were exchanged for Senior Preferred Shares of the company, Series B and Series A, respectively, having the same terms, except for the elimination of their general voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. and the addition of redemption rights at the option of the holders. The details of the reorganization and amalgamation are set out in the Brascade Resources' Management Proxy Circular dated August 20, 2004. At the time of the reorganization and amalgamation, Brascade Resources and 4250231 Canada Limited were controlled by Brascan and, accordingly, the accounts of the company are prepared on a continuity of interest basis with the assets and liabilities being combined at their carrying values Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. in the accounts of their predecessors, with the differences from exchange amounts being recorded as an adjustment to retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. (deficit). 2. SUMMARY OF ACCOUNTING POLICIES Reference is made to the most recently issued Annual Report of the company, which includes information necessary or useful for understanding the company's businesses and financial statement presentation. In particular, the company's significant accounting policies and practices are presented as Note 2 to the Consolidated Financial Statements included in that Report, and have been consistently applied in the preparation of these interim financial statements, except for the changes in accounting policies, described in Note 3. The interim financial statements are unaudited and follow the accounting policies summarized in the notes to the annual financial statements. Financial information in this interim report reflects any adjustments (consisting only of normal recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. adjustments) that are, in the opinion of management, necessary to a fair statement of results for the interim periods in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . The results reported in these financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain prior period amounts have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current period's presentation. 3. CHANGES IN ACCOUNTING POLICIES Consolidation of Variable InterestsEntities, AcG 15 Effective January 1, 2005, the company implemented the new Canadian New Canadian Noun Canad a recent immigrant to Canada Institute of Chartered Accountants char·tered accountant n. Chiefly British Abbr. CA A member of one of the institutes of accountants granted a royal charter. ("CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) ") issued Accounting Guideline guideline Medtalk A series of recommendations by a body of experts in a particular discipline. See Cancer screening guidelines, Cardiac profile guidelines, Gatekeeper guidelines, Harvard guidelines, Transfusion guidelines. 15, "Consolidation of Variable Interest Entities" (AcG 15) with retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of prior periods. AcG 15 provides guidance for applying the principles in handbook
This article is about reference works. For the subnotebook computer, see .
Return independent of the benchmark. The residual return is the return relative to beta times the benchmark return. To be exact, an asset's residual return equals its excess return minus beta times the benchmark excess return. . AcG 15 requires consolidation of VIEs by the Primary Beneficiary beneficiary Person or entity (e.g., a charity or estate) that receives a benefit from something (e.g., a trust, life-insurance policy, or contract). A primary beneficiary receives proceeds from a trust or insurance policy before any other. , which is defined as the party which has exposure to them majority of a VIEs expected losses and/or expected residual returns. The adoption of AcG 15 resulted in the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of the C$255 million debentures, exchangeable for up to 20 million common shares of Norbord, that were issued on September 30, 2004, to accounts payable. There was no impact to common equity. Liabilities and Equity, CICAHandbookSection 3861 Effective January 1, 2005, the company adopted the amendment to CICA Handbook Section 3861, Financial Instruments: Disclosure and Presentation with retroactive restatement of prior periods. The amendment requires certain obligations that must or could be settled with a variable number of the issuer's own equity instruments to be presented as a liability. As a result, dividends and interests paid on these equity instruments have been reclassified as interest expense and unrealized foreign exchange movements have been recorded in income in 2004 by the company's equity accounted investee. The retroactive adoption of this amendment resulted in a cumulative adjustment to opening retained earnings at January 1, 2004 of $10 million. Net income attributable to common shares for the year ended December 31, 2004 will be reduced reflecting the foregoing items by $8 million. The impact on net income attributable to common shares for the six months ended June 30, 2005 was $nil (2004 - $nil). 4. TERM DEBT The term debt is due to a common control company, bears interest at 6.5% and is due on June 30, 2009.
5. RETRACTABLE PREFERRED SHARES
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June 30 December 31
US$ millions, except number of shares 2005 2004
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(unaudited)
6,846,504 Class 1 Senior Preferred
Shares, Series B
(2004 - 6,846,504) $ 222.7 $ 228.3
52,807,686 Class 2 Junior Preferred
Shares, Series A
(2004 - 52,807,686) 1,637.4 1,637.4
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$ 1,860.1 $ 1,865.7
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6. SHAREHOLDERS' EQUITY
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June 30 December 31
US$ millions, except number of shares 2005 2004
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(unaudited)
25,000,003 Common shares
(2004 - 25,000,003) $ 512.9 $ 512.9
Deficit (503.3) (1,008.8)
Cumulative translation
adjustment 2.5 53.6
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$ 12.1 $ (442.3)
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7. RESTATED COMPARATIVE FIGURES Certain comparative information has been restated to reflect the adoption of amendments to the CICA Handbook Section 3861, Financial Instruments - Disclosure and Presentation, and the implementation of Accounting Guideline 15, Consolidation of Variable Interest Entities. Brascade Corporation (TSX:BCA.PR.B) |
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