Brascan Announces 25% Increase In Cash Flow From Operations Per Share.Business Editors TORONTO--(BUSINESS WIRE)--Feb. 14, 2002 Brascan Corporation (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). : 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) .A, NYSE NYSE See: New York Stock Exchange : BNN) today reported cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $3.20 per share, a 25% increase over the $2.55 per share recorded in 2000. Total cash flow from operations increased to a record $601 million, compared with $495 million in 2000. Significant progress was made in 2001 in translating our strong operating performance into higher economic value for shareholders. This was achieved by lowering our overall cost of capital; by improving our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ; by strengthening the sustainability of our operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. ; by investing in growth opportunities; and by repurchasing shares at discounts to underlying values. Years Ended December 31 Millions, Except Per Share Amounts (CDN.$) 2001 2000 1999 =============================================================== Net operating income $1,762 $1,568 $1,391 Cash flow from operations $ 601 $ 495 $ 398 Cash flow from operations per share $ 3.20 $ 2.55 $ 2.00 Net income - including investment gains in 2000 and 1999 $ 311 $ 648 $ 423 Cash return on capital 13% 11% 9% --------------------------------------------------------------- Net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the year ended December 31, 2001 increased to $1.8 billion from $1.6 billion in 2000. These results include positive growth from each of Brascan's operating businesses - real estate, financial and power generation. The increase in cash flow from operations is a direct result of the company's efforts over the past five years to improve the quality and sustainability of the cash flows generated by each of our operating businesses. We have focussed our performance measurement metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. on cash flow from operations, which given the nature of the company's operations is, in our opinion, the most effective measurement of value creation. While this may not be a number directly comparable to other companies' results, it is believed cash flow from operations is the metric relevant to Brascan shareholders for measurement purposes, in addition to net income. Net income before investment gains and non-cash equity accounted adjustments related to our natural resource investments increased by 45% to $349 million compared to $240 million in 2000. Each of our operating businesses increased their contribution to net income for the fifth consecutive year. Natural resource investments were severely impacted by lower product prices.
Years Ended December 31
Millions, Except Per
Share Amounts (CDN.$) 2001 2000 1999
===============================================================
Net income before investment gains
and resource investments $ 349 $ 240 $ 180
Equity accounted income (loss)
from resource investments (38) 148 106
Investment gains - 260 137
---------------------------------------------------------------
Net income $ 311 $ 648 $ 423
===============================================================
Net income per share
Before investment gains and
resource investments $ 1.74 $ 1.12 $ 0.78
From continuing operations $ 1.52 $ 1.96 $ 1.38
Net income $ 1.52 $ 3.41 $ 2.15
===============================================================
Operations During 2001, significant value was added to the company's operating businesses through acquisitions, internal growth and the selective development of new opportunities. We proactively re-leased over 3 million square feet of office space at higher rates early in 2001, widened profit margins in our power generating operations and successfully expanded our financial businesses. With respect to our two resource investments, good progress was made in assisting Noranda and Nexfor restructure their businesses to deal with the realities presented by the economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. and the lowest product prices in decades. Commercial property operations generated $1.1 billion of operating cash flow, up 13% from $960 million in 2000. This reflects strong internal growth generated by new leases, contractual step-ups in rental rates, pro-active pro·ac·tive or pro-ac·tive adj. Acting in advance to deal with an expected difficulty; anticipatory: proactive steps to prevent terrorism. re-negotiation of leases prior to maturity and income on sales of partial property interests. In New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , the company responded swiftly and effectively to the tragic events of September 11, 2001. Working closely with government officials and supported by our other operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , exceptional progress was made in reopening Reopening Treasury offerings of additional amounts of outstanding issues, rather than an entirely new issue. A reopened issue will always have the same maturity date, CUSIP number, and interest rate as the original issue. the company's office buildings in downtown Manhattan well ahead of schedule. Financial operations contributed $303 million of operating cash flow, up 10% from $275 million in 2000. The increase reflects growth in investment banking and asset management services, as well as higher investment gains. Financial assets Financial assets Claims on real assets. increased during the year to $3.1 billion, supplemented by income earned on $2.9 billion of funds managed for others. We increased our professional complement in response to the growing demand for merchant banking and financial advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal . The continued trend towards outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. and specialization A career option pursued by some attorneys that entails the acquisition of detailed knowledge of, and proficiency in, a particular area of law. As the law in the United States becomes increasingly complex and covers a greater number of subjects, more and more attorneys are has also provided new opportunities for our asset management and business services operations. Power generating operations produced $142 million of operating cash flow, up 15% from $123 million in 2000. Higher returns from energy marketing and improved water flows on the Mississippi River Mississippi River River, central U.S. It rises at Lake Itasca in Minnesota and flows south, meeting its major tributaries, the Missouri and the Ohio rivers, about halfway along its journey to the Gulf of Mexico. were partly offset by the impact of dry weather conditions elsewhere. With more normal water levels expected in 2002 and increased contributions from recent acquisitions, cash flows are expected to increase significantly this year. Plans are now being made to build key power transmission interconnections between Ontario and Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). and increase our transmission capacity in Maine Maine, ship Maine, U.S. battleship destroyed (Feb. 15, 1898) in Havana harbor by an explosion that killed 260 men. The incident helped precipitate the Spanish-American War (Apr., 1898). Commanded by Capt. Charles Sigsbee, the ship had been sent (Jan. that will enhance the company's ability to market power. Residential property operations generated $140 million of cash flow from the sale of 3,306 housing units and 6,581 building lots, up 19% from $118 million in 2000. Home sales in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. were surprisingly strong, as low interest rates and the active home refinancing Refinancing An extension and/or increase in amount of existing debt. market bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. sales. The first month of 2002 has been the best January in the past five years and backlogs are at or above 2001 levels. In South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , housing operations also performed well, as buyers sought quality condominiums which are considered safe investments to preserve value. Investments in Noranda and Nexfor contributed $96 million to cash flows, consistent with 2000, representing the dividends received from these investments. Noranda and Nexfor experienced decreases in their internal cash flows, as a result of the significant decline in the prices of most base metals and building products. 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. and 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. prices for the year were, on average, 20% below their 2000 levels. With the natural resource industry challenged by the severe market downturn of product prices, efforts were intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: to reduce costs and achieve productivity improvements. Noranda and Nexfor are reaching the final stages of major capital investment programs initiated nearly five years ago to upgrade their operating assets Operating Assets Another term for working capital. . Commercial production commenced at four new operations - the Antamina copper-zinc mine, an aluminum foil Noun 1. aluminum foil - foil made of aluminum aluminium foil, tin foil foil - a piece of thin and flexible sheet metal; "the photographic film was wrapped in foil" mill and two panel-board plants - and work is nearing completion on the Altonorte copper smelter expansion. Noranda is, however, experiencing a slower than expected start-up Start-up The earliest stage of a new business venture. at its new magnesium magnesium (măgnē`zēəm, –zhəm), metallic chemical element; symbol Mg; at. no. 12; at. wt. 24.305; m.p. about 648.8°C;; b.p. about 1,090°C;; sp. gr. 1.738 at 20°C;; valence +2. plant, which will take some time to contribute to earnings. Capital Repurchases During 2001, Brascan repurchased 3.8 million common shares. This is in addition to the 6.4 million shares repurchased in 2000 and 1.7 million shares repurchased to date in 2002. In 2001 we also acquired 100% ownership of our power generating operations, some of the company's real estate operations were privatized and the company's interest in its financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. operations was increased significantly. In total, $621 million was invested during 2001 in repurchasing the company's shares and equity interests of the company's operating businesses. These capital repurchases have increased the underlying value of a Brascan share and assisted us to redefine Verb 1. redefine - give a new or different definition to; "She redefined his duties" define, delimit, delimitate, delineate, specify - determine the essential quality of 2. the company. Our ultimate objective is to own the majority of the company's core businesses privately. Investment Initiatives The following initiatives were undertaken in 2001 to increase returns from the company's operating businesses: -- Acquired four land leases and selected development properties in Toronto and Calgary. -- Acquired six hydroelectric power plants in Maine and two in British Columbia. -- Began construction on five hydroelectric plants, one in British Columbia, one in Ontario, and three in southern Brazil. -- Expanded our financial services operations through the acquisition of New York based Enterprise Reinsurance to further develop the company's finite risk reinsurance business, and by committing $200 million to the newly formed $400 million Tricap restructuring fund. We also increased our investment in Nexfor to 41%, up from the 27% that we received on the initial distribution from Noranda in late 1998. Nexfor's business has been substantially repositioned to be one of the lowest-cost producers of building products in North America. Liquidity and Capital Generation Brascan ended 2001 in its best financial position ever. We have substantial cash and liquid short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. securities as well as undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely bank lines. Furthermore, strengthened credit ratings have improved our access to the international capital markets. Our strong financial position is the culmination of numerous initiatives taken in recent years to upgrade the company's assets and financial profile, including the issue of $375 million of preferred equity and $450 million of seven-year term notes in the second half of 2001. Our real estate operations generated over $1.5 billion of cash from operations, property refinancings and the sale of partial interests in mature office properties in Boston and Calgary. A continued monetization Monetization The securitization of the gross revenues of a contract. program for mature assets in 2002 should realize additional capital for investment. We continued to broaden the funding base for our financial operations, particularly our asset management activities. This included the launch of the Tricap 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). Fund, Diversified diversified (di·verˑ·s 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. Financial II, and the expansion of our Imagine reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. operations. Our power generating business refinanced matured facilities and used the company's high performing income fund to source low-cost capital to fund new acquisitions and to leverage returns. No major capital was generated from our resource investments other than the receipt of $96 million of regular dividends. This is in contrast to 1998 when a special distribution of $484 million was received from Noranda, consisting of shares of Nexfor and Canadian Hunter. The Canadian Hunter shares were sold in 2000, generating $600 million of cash, including $250 million of net gains, which have been reinvested into the company's operating businesses. Additional Information A Supplementary Information Package with more detailed financial information is contained on our web site, which should be read in conjunction with this press release. The Supplementary Information Package contains management's estimates of underlying values based on an analysis of underlying cash flows on a business unit basis. In addition, we have posted on our web site the draft Shareholders Letter which will be included in our Annual Report to be mailed next month. Our new financial presentation includes the full consolidation of our real estate, financial and power generation businesses and, in our view, provides greater visibility of Brascan's underlying operating cash flows and the high quality assets which make up our operating businesses. Dividend Declaration On February 13, 2002, the Board of Directors declared a quarterly common share dividend of $0.25 per share, payable May 31, 2002 to shareholders of record on May 1, 2002. Information on all the company's common and preferred share dividends is also posted on our web site. Outlook The company's goal is to build long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. shareholder value by acquiring high quality assets at attractive values, by actively working to increase returns from currently owned assets, and by continuously pursuing new opportunities for future growth. With well established positions in the company's three operating businesses and management teams dedicated to the creation of value, we believe that we are well positioned to exceed our goals of 20% cash return on equity and 15% annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cash flow growth. ------------ Brascan Corporation owns, manages and builds businesses which generate sustainable cash flows. Current operations are largely in the real estate, financial and power generation sectors. In addition, Brascan holds investments in the resource sector. Brascan is listed on The Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol BNN.A and the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol BNN. For more information, please visit our web site at www.brascancorp.com or contact: Katherine C. Vyse Vice-President, Investor Relations Investor relations The process by which the corporation communicates with its investors. 416-369-8246 ================================================================= A conference call has been arranged for investors and analysts to discuss Brascan's year end results with senior management on Thursday, February 14 at 2:00 p.m. (ENT ENT ears, nose, and throat (otorhinolaryngology). ENT abbr. ear, nose, and throat ENT ear, nose and throat. ENT Ears, nose & throat; formally, otorhinolaryngology ). The call can be accessed by dialing 416-641-6697 (local and overseas) or 1-888-303-1413 (toll free in North America) at approximately 1:50 p.m. A taped rebroadcast of the teleconference will be available until March 14, 2002 by calling 416-626-4100 and entering reservation number 20264611. This conference call will also be Webcast live on our web site at www.brascancorp.com, where it will be archived for future reference. =================================================================
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Income
---------------------------------------------------------------
Years Ended December 31 Proforma (Note 1)
Millions, Except Per --------------------
Share Amounts 2001 2000 1999 2001 2000
===============================================================
Total revenues $4,676 $4,205 $3,575 $1,229 $1,216
----------------------------------
Net operating income
Commercial property
operations 1,087 960 868 130 186
Financial operations 303 275 263 303 275
Power generating operations 142 123 91 142 123
Residential property
operations 140 118 94 8 3
Other operations 90 92 75 25 25
---------------------------------------------------------------
1,762 1,568 1,391 608 612
Expenses
Interest expense 724 667 625 266 280
Minority share of income
before non-cash items 454 416 362 116 132
Other operating costs 79 84 100 11 18
---------------------------------------------------------------
Income before non-cash items 505 401 304 215 182
Depreciation and
amortization 157 139 111 39 38
Taxes and other provisions 122 137 93 (7) 15
Minority share of
non-cash items (123) (115) (80) - -
Equity accounted
loss (income) 38 (148) (106) (128) (259)
---------------------------------------------------------------
Income from continuing
operations 311 388 286 311 388
Income and gains on sale of
discontinued operations - 260 137 - 260
---------------------------------------------------------------
Net income $ 311 $ 648 $ 423 $ 311 $ 648
===============================================================
Per common share - basic
Income from continuing
operations $ 1.54 $ 1.96 $ 1.38 $ 1.54 $ 1.96
Net income $ 1.54 $ 3.47 $ 2.17 $ 1.54 $ 3.47
===============================================================
Per common share - diluted
Income from continuing
operations $ 1.52 $ 1.96 $ 1.38 $ 1.52 $ 1.96
Net income $ 1.52 $ 3.41 $ 2.15 $ 1.52 $ 3.41
===============================================================
Consolidated Statement of Cash Flow from Operations
---------------------------------------------------------------
Years Ended December 31 Proforma (note 1)
Millions, Except Per -------------------
Share Amounts 2001 2000 1999 2001 2000
===============================================================
Income before non-cash items $ 505 $ 401 $ 304 $ 215 $ 182
Dividends from Noranda Inc. 75 75 75 75 75
Dividends from Nexfor Inc. 21 19 19 21 19
Other - - - 40 28
---------------------------------------------------------------
Cash flow from operations $ 601 $ 495 $ 398 $ 351 $ 304
===============================================================
Cash flow from operations,
per common share $ 3.20 $ 2.55 $ 2.00 $ 1.76 $ 1.47
===============================================================
Consolidated Statement of Income
---------------------------------------------------------------
Three Months Ended
December 31 Proforma (note 1)
Millions, Except Per --------------------
Share Amounts 2001 2000 1999 2001 2000
===============================================================
Total revenues $1,311 $1,343 $ 968 $ 311 $ 324
----------------------------------
Net operating income
Commercial property
operations 248 248 223 25 57
Financial operations 76 74 65 68 73
Power generating operations 29 20 10 29 20
Residential property
operations 42 37 31 5 -
Other operations 19 28 5 3 5
---------------------------------------------------------------
414 407 334 130 155
Expenses
Interest expense 174 175 125 54 74
Minority share of income
before non-cash items 107 108 85 28 32
Other operating costs 16 20 30 - 4
---------------------------------------------------------------
Income before non-cash items 117 104 94 48 45
Depreciation and amortization 41 43 27 10 11
Taxes and other provisions 27 30 62 (5) (2)
Minority share of
non-cash items (31) (35) (31) - -
Equity accounted
loss (income) 35 (25) (45) (2) (55)
---------------------------------------------------------------
Income from continuing
operations 45 91 81 45 91
Income and gains on sale of
discontinued operations - - 121 - -
---------------------------------------------------------------
Net income $ 45 $ 91 $ 202 $ 45 $ 91
===============================================================
Per common share - basic
Income from continuing
operations $ 0.18 $ 0.45 $ 0.41 $ 0.18 $ 0.45
Net income $ 0.18 $ 0.45 $ 1.11 $ 0.18 $ 0.45
===============================================================
Per common share - diluted
Income from continuing
operations $ 0.17 $ 0.45 $ 0.40 $ 0.17 $ 0.45
Net income $ 0.17 $ 0.45 $ 1.08 $ 0.17 $ 0.45
===============================================================
Consolidated Statement of Cash Flow from Operations
---------------------------------------------------------------
Three Months Ended
December 31 Proforma (note 1)
Millions, Except Per -------------------
Share Amounts 2001 2000 1999 2001 2000
===============================================================
Income before non-cash items $ 117 $ 104 $ 94 $ 48 $ 45
Dividends from Noranda Inc. 19 19 19 19 19
Dividends from Nexfor Inc. 5 5 5 5 5
Other - - - 13 16
---------------------------------------------------------------
Cash flow from operations $ 141 $ 128 $ 118 $ 85 $ 85
===============================================================
Cash flow from operations,
per common share $ 0.75 $ 0.67 $ 0.60 $ 0.42 $ 0.42
===============================================================
Consolidated Balance Sheet
---------------------------------------------------------------
As At December 31 Proforma
Millions 2001 2000 2000
===============================================================
Assets (Note 1)
Cash and cash equivalents $ 607 $ 658 $ 347
Accounts receivable 2,202 2,141 985
Operating assets
Commercial properties 9,580 9,838 3,100
Financial operations 3,137 3,016 3,016
Power generating plants 1,511 1,358 1,358
Residential properties 1,110 945 112
Assets under development 1,631 1,302 353
Investment in Noranda Inc.
and Nexfor Inc. 2,151 2,209 2,209
---------------------------------------------------------------
$21,929 $21,467 $ 11,480
===============================================================
Liabilities
Non-recourse borrowings
Asset specific mortgages $ 7,160 $ 7,017 $ 543
Other debt of subsidiaries 3,161 3,107 1,927
Corporate borrowings 1,313 1,360 1,360
Accounts and other payables 1,718 1,630 1,304
Shareholders' interests
Minority interests of others
in assets 2,720 2,722 1,057
Preferred equity
Corporate 1,107 732 732
Subsidiaries 489 718 376
Common equity 4,261 4,181 4,181
---------------------------------------------------------------
$21,929 $21,467 $ 11,480
===============================================================
Note: 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. " within the meaning of Section 27Aof the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe", "expect", "anticipate", "intend", "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Reliance should not be placed on forward-looking statements because they 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 achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include general economic conditions, interest rates, availability of equity and debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay and other risks detailed from time to time in the company's continuous disclosure documents, including its 40-F filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. 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. INVESTMENT IN BROOKFIELD PROPERTIES Brookfield Properties Corporation TSX: BPO NYSE: BPO is a Toronto-based North American commercial real estate company. Brookfield Asset Management owns 50% of its outstanding common shares. CORPORATION a) Acquisition As a result of issuer bids by Brookfield Properties Corporation ("Brookfield") for its common shares outstanding, Brascan's fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. voting interest Voting interest in business and accounting is a percentage of voting stock owned. This notion is different from economic interest that refers to a percentage of all the equity issued, including preferred stock, warrants, and so on. in this company increased to in excess of 50%. Effective December 31, 2001, Brascan acquired control of Brookfield for accounting purposes and consolidated its assets and liabilities as at that date. The purchase price consideration, which amounted to $1,559 million as at December 31, 2001, represents the equity accounted carrying value 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. of Brascan's interest in Brookfield. The allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of the purchase price is as follows:
December 31
Millions 2001
===============================================================
Assets acquired $12,839
Liabilities assumed 9,824
Minority interests of others in assets 1,456
---------------------------------------------------------------
Net assets acquired $ 1,559
===============================================================
b) Proforma Financial Statements Effective December 31, 2001, the company commenced consolidating the results of Brookfield. As a result, the 2000 proforma balance sheet and the 2001, 2000 and 1999 proforma statements of income have been presented for comparative purposes giving effect to consolidating the results of Brookfield since January 1, 1999 at the company's ownership levels in those years. Prior to December 31, 2001, Brookfield was accounted for using the equity method of accounting under 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 consolidation of Brookfield has no effect on net income, income per share or 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. . |
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