Brookfield Properties Reports First Quarter 2008 Results.All dollar references are in U.S. dollars unless noted otherwise. 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 -- 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 (BPO BPO Business Process Outsourcing BPO Benevolent & Protective Order (of Elks of the USA) BPO Benzoyl Peroxide BPO Business Process Optimization BPO Broker Price Opinions BPO Buffalo Philharmonic Orchestra : NYSE NYSE See: New York Stock Exchange , TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension ) today announced that net income for the three months ended March 31, 2008 was $23 million or $0.06 per diluted share, compared to $53 million or $0.13 per diluted share during the same period in 2007. The prior period included a net gain of $34 million or $0.08 per diluted share on the sale of three non-core properties in Toronto and Ottawa. Strong commercial property results, largely offsetting slow residential operations, resulted in funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. ("FFO FFO See: Funds from operations ") of $126 million or $0.32 per diluted share for the three months ended March 31, 2008 compared with $129 million or $0.32 per diluted share during the same period in 2007. Commercial property 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 first quarter of 2008 was $349 million, up 11.5% from $313 million during the first quarter of 2007. Residential operations contributed $18 million of net operating income, compared with $42 million in the same period in 2007. During the first quarter, Brookfield Properties leased over one million square feet of space at an average net rent of $32.71 per square foot, which represents a 42% improvement versus the average in-place net rent at the beginning of the quarter of $23.11 per square foot. The company's portfolio-wide occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) finished the quarter at 95.4%. The fundamentals of the Western Canadian residential operations remain strong despite a slow quarter as a result of higher-than-normal housing inventory levels. With oil and natural gas prices hitting new highs, Brookfield Properties expects the residential division to continue to increase its sales pace which has improved each month since the beginning of the year. HIGHLIGHTS OF THE FIRST QUARTER Delivered 4 Allen Center, Houston, to tenant Chevron, which has fully leased the building. The asset is being reclassified from a redevelopment to an operating property. Brookfield Properties acquired the 1.2 million square foot building at 1400 Smith Street in 2006 for $120 million. Completed the disposition program for the non-core portfolio acquired from O&Y with the sale of Acres House in Niagara Falls Niagara Falls, waterfall, United States and Canada Niagara Falls, in the Niagara River, W N.Y. and S Ont., Canada; one of the most famous spectacles in North America. The falls are on the international line between the cities of Niagara Falls, N.Y. subsequent to the first quarter. Proceeds generated from the disposition program following the November 2005 O&Y acquisition total $200 million from the sale of 15 properties comprised of 1.7 million square feet in Toronto, Calgary and Winnipeg. Advanced developments under construction which are 53% leased in aggregate. In Toronto, the 1.2 million square foot Bay Adelaide Centre West Tower continues on budget and on schedule. The concrete core has reached the 27th floor, the structural steel is erected up to the 18th floor and the installation of the curtain wall curtain wall Nonbearing wall of glass, metal, or masonry attached to a building's exterior structural frame. After World War II, low energy costs gave impetus to the concept of the tall building as a glass prism, an idea originally put forth by Le Corbusier and Ludwig Mies has commenced. Total pre-leasing stands at 65%. In Calgary, the 265,000 square foot Bankers Court project completed above-grade structural work to the sixth floor, nearing the halfway mark for the structure. Base building mechanical and electrical work is progressing and curtain wall installation is beginning. The building is 100% pre-leased. In Washington, D.C., 77 K Street, at 327,000 square feet, continues towards completion on time by year-end. Two Reston Crescent, at 185,000 square feet, is complete; the garage will be completed in June 2008. Refinanced or extended $370 million of debt maturing in the quarter. Transactions included Silver Spring Metro Plaza and 1250 Connecticut Ave. for $160 million, 2000 L Street for $56 million, and Bethesda Crescent for $33 million, in addition to various others. These financings carry an average interest rate of 5.5%. Repurchased 300,000 common shares of the company at an average price of $18.64. Since the inception of the company's normal course issuer bid in 1999, Brookfield Properties has invested $423 million, acquiring 36.3 million common shares at an average price of $11.66. Leased 1,044,000 square feet of space. New leases represent 62% of the total during the first quarter while renewals represent the remainder. Highlights include: Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. - 368,000 square feet * A 10-year lease with Analysis Group for 26,000 square feet at Bank of America Plaza There are several buildings in the United States called Bank of America Plaza:
Houston - 157,000 square feet * A 5-year lease with Susquent Energy Management for 46,000 square feet at Two Allen Center. Washington, D.C. - 133,000 square feet * A 10-year lease with the Federal Labor Relations Authority for 45,000 square feet at 1400 K Street. * A 12-year lease with Westerman Hattori for 34,000 square feet at 1250 Connecticut Avenue. Toronto - 114,000 square feet * A 5-year lease renewal with St. Michael's Hospital St. Michael's Hospital may refer to:
* An 8-year lease with Ammirati Puris/Interpublic for 24,000 square feet at Queen's Quay Terminal Queen's Quay Terminal was a cold storage facility, the Toronto Terminal Warehouse, built in 1926 by Moores & Dunford (NYC) and converted to a condo/mall complex in 1983. The renovations by Zeidler Roberts added 3 floors to the original 10 floor structure, for a total of 750,000 . New York - 92,000 square feet * An 11-year lease with Major League Baseball "MLB" and "Major Leagues" redirect here. For other uses, see MLB (disambiguation) and Major Leagues (disambiguation). Major League Baseball (MLB) is the highest level of play in North American professional baseball. for 72,000 square feet at 245 Park Avenue. Calgary - 87,000 square feet * A 12-year lease with Sherritt International for 68,000 square feet at Fifth Avenue Place. OUTLOOK "With a strong tenant base and conservative lease expiry profile, Brookfield Properties is well-positioned in the face of softening U.S. economic conditions," stated Ric Clark, President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Brookfield Properties Corp. "For 2008, we are focused on positioning ourselves to take advantage of opportunities which may arise under these economic circumstances, and to advance our development pipeline." Net Operating Income and FFO This press release and accompanying financial information make reference to net operating income and funds from operations on a total and per share basis. Net operating income is defined as income from property operations after operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. have been deducted, but prior to deducting financing, administrative and income tax expenses. Brookfield Properties defines FFO as net income prior to extraordinary items, one-time transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). , income taxes, depreciation and amortization, and certain other non-cash items. The company uses net operating income and FFO to assess its operating results. Net operating income is important in assessing operating performance and FFO is a relevant measure to analyze real estate, as commercial properties generally appreciate rather than depreciate depreciate v. in accounting, to reduce the value of an asset each year theoretically on the basis that the assets (such as equipment, vehicles or structures) will eventually become obsolete, worn out and of little value. (See: depreciation) . The company provides the components of net operating income and a full reconciliation from net income to FFO with the financial information accompanying this press release. The company reconciles FFO to net income as opposed to cash flow from operating activities as it believes net income is the most comparable measure. Net operating income and FFO are both non-GAAP measures which do not have any standard meaning prescribed by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and therefore may not be comparable to similar measures presented by other companies. Forward-Looking Statements This press release, particularly the "Outlook" section, contains forward-looking statements and information within the meaning of applicable securities legislation. Although Brookfield Properties believes that the anticipated future results, performance or achievements expressed or implied 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 because they involve assumptions, 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. Accordingly, the company cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements and information include, but are not limited to, general economic conditions; local real estate conditions, including the development of properties in close proximity to the company's properties; timely leasing of newly-developed properties and re-leasing of occupied square footage upon expiration; dependence on tenants' financial condition; the uncertainties of real estate development and acquisition activity; the ability to effectively integrate acquisitions; 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 ; the impact of newly-adopted accounting principles on the company's accounting policies and on period-to-period comparisons of financial results; and other risks and factors described from time to time in the documents filed by the company with the securities regulators in Canada and the United States The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. , including in the Annual Information Form under the heading "Business of Brookfield Properties - Company and Real Estate Industry Risks," and in the company's annual report under the heading "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial ." The company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by securities laws. Dividend Declaration The Board of Directors of Brookfield Properties declared a quarterly common share dividend of $0.14 per share payable on June 30, 2008 to shareholders of record at the close of business on June 2, 2008. Shareholders resident in the United States will receive payment in U.S. dollars and shareholders resident in Canada will receive their dividends in Canadian dollars at the exchange rate on the record date, unless they elect otherwise. The quarterly dividends payable Dividends payable The declared dividend dollar amount that a company is obligated to pay. for the Class AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. Series F, G, H, I, J and K 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. were also declared payable on June 30, 2008 to shareholders of record at the close of business on June 16, 2008. Conference Call Analysts, investors and other interested parties are invited to participate in the company's live conference call reviewing 2008 first quarter results on Friday, April 25, 2008 at 2:30 p.m. Eastern Time. Scheduled speakers are Ric Clark, President and CEO, and Bryan Davis, Chief Financial Officer. Management's presentation will be followed by a question and answer period. To participate in the conference call, please dial 800.374.0199; pass code 39849145, five minutes prior to the scheduled start of the call. A replay of this call can be accessed through May 25, 2008 by dialing 800.642.1687, pass code 39849145. A webcast of the call will be available at www.brookfieldproperties.com for 30 days. Along with the earnings news release, an updated supplemental information package will be available on the company's web site, www.brookfieldproperties.com, before the market open on April 25, 2008. Supplemental Information Investors, analysts and other interested parties can access Brookfield Properties' Supplemental Information Package at www.brookfieldproperties.com under the Investor Relations/Financial Reports section. This additional financial information should be read in conjunction with this press release. Brookfield Properties Profile One of North America's largest commercial real estate companies, Brookfield Properties owns, develops and manages premier office properties in major U.S. and Canadian cities. The portfolio is comprised of interests in 110 properties totaling 76 million square feet in the downtown cores of New York, Boston, Washington, D.C., Los Angeles, Houston, Toronto, Calgary and Ottawa. Landmark assets include the World Financial Center in Manhattan, Brookfield Place in Toronto, Bank of America Plaza in Los Angeles and Bankers Hall in Calgary. The company also holds interests in 17 million square feet of high-quality, centrally located development and redevelopment properties in its major markets. The company's common shares trade on the NYSE and TSX under the symbol BPO. For more information, visit www.brookfieldproperties.com. [TABLE OMITTED] (i) Includes $128 million of commercial properties and $3 million of other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. associated with discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. at March 31, 2008 (December 31, 2007 - $3 million and $1 million, respectively). (ii) Includes commercial property debt of $108 and $6 million of other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. associated with discontinued operations at March 31, 2008 (December 31, 2007 - nil and $3 million, respectively). [TABLE OMITTED] [TABLE OMITTED] (i) Represents depreciation and amortization, future income taxes and gains related to discontinued operations. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] (i) Including fee income [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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