Brookfield Reports A 12% Increase In Funds From Operations Per Share In The Second Quarter Of 2002.Business Editors NEW YORK--(BUSINESS WIRE)--July 30, 2002 Investors, analysts and other interested parties can access Brookfield's (NYSE NYSE See: New York Stock Exchange :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 ) (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :BPO) Supplemental Information Package and Corporate Profile, which form the basis of this release, on Brookfield's website under the Investor Information/Financial Reports section at www.brookfieldproperties.com. Brookfield's second quarter investor conference call can be accessed by teleconference on July July: see month. 30, 2002 at 3:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT at 1-800-576-7258. The archived teleconference may be accessed by dialing 1-800-558-5253 with reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 20699492. Alternatively, the conference call can be accessed by Webcast on the Brookfield Brookfield. 1 Village (1990 pop. 18,876), Cook co., NE Ill., a residential suburb of Chicago; inc. 1893. The noted Chicago Zoological Park (Brookfield Zoo) is there. 2 City (1990 pop. 35,184), Waukesha co., SE Wis. website at www.brookfieldproperties.com. 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: NYSE, TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). ) today announced operating results for the second quarter ended June June: see month. 30, 2002.
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Results of Operations For the 3 Months For the 6 Months
Ended June 30 Ended June 30
------------------------------------------
(US$ millions, except
per share information) Increase 2002 2001 Increase 2002 2001
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Funds from operations 13% $98 $87 11% $188 $170
prior to lease
termination income and
gains
Funds from operations per 12% $0.57 $0.51 12% $1.10 $0.98
share prior to lease
termination income and
gains
Net income per share prior 10% $0.33 $0.30 17% $0.63 $0.54
to lease termination
income and gains
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FINANCIAL HIGHLIGHTS For the three months ended June 30, 2002, 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. , prior to lease termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. income and gains, increased to $98 million or $0.57 per share, compared with $87 million or $0.51 per share for the same period in 2001. Total funds from operations and gains for the six months ended June 30, 2002 increased to $223 million or $1.31 per 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. share, compared to $218 million or $1.27 per diluted share for the same period in 2001. Net income per share on a diluted basis for the six months ended June 30, 2002 was $0.80 compared with $0.76 per share for the same period in 2001. Ric Clark, President and 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, characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. the results as "evidence of the strength of Brookfield's strategy in delivering solid earnings performance over the 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. and throughout economic cycles. We are confident that our long lease terms and solid tenant base will translate (1) To change one language into another; for example, assemblers, compilers and interpreters translate source language into machine language. (2) In computer graphics, to move an image on screen without rotating it. into continued growth in cashflows and net asset values." The Board of Directors of Brookfield declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a quarterly common share dividend of US$0.10 per share, payable September September: see month. 30, 2002 to shareholders of record at the close of business on September 1, 2002. Shareholders resident in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. will receive payment in US dollars and shareholders resident in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of will receive their dividends in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents at the exchange rate on the date of record, unless they elect otherwise. MAJOR INITIATIVES IN THE SECOND QUARTER -- Increased commercial operating income by 6%. During the second quarter of 2002, net operating income from commercial property operations, before lease termination income and gains, increased 6% to $152 million, compared with $143 million in 2001 after removing the impact of properties sold. Internal growth from the same properties owned last year accounted for virtually 100% of the increase. -- Leased approximately 600,000 square feet of space in the second quarter of 2002, despite a generally slower leasing environment. This increased total year to date leasing to 1.1 million square feet. Notable transactions included a recently completed lease renewal for 112,000 square feet with Duke Energy at Republic Plaza in Denver. This transaction involved a partial restacking of the building, which will facilitate the further renewal of additional tenants in the building totaling 75,000 square feet. Other transactions included AGF Management Ltd. leasing 231,000 square feet in Toronto, Folksamerica leasing 41,000 square feet at One Liberty Plaza, and a further 47,000 square feet leased to Noranda Inc. in Toronto. Subsequent to June 30, 2002, EnCana Corporation, a major Canadian integrated oil and gas company, leased 200,000 square feet at Bankers Hall, further enhancing the value of this premier asset. -- Increased contribution from residential property operations to $26 million in the second quarter, an increase of 13% over 2001. These operations continued to benefit from the low interest rate environment, fueling consumer demand for new homes across North America. Residential property operations have achieved 100% of expected sales for 2002 at this point in time, and sales for 2003 are now being booked. -- Continued return of New York tenants. Merrill Lynch has fully occupied Four World Financial Center with 7,000 employees. The repopulation of Two World Financial Center continues, presently at 70%, including 1,500 Merrill Lynch employees. American Express is in the process of consolidating its 4,000 employees at Three World Financial Center, which is expected to be complete by September. Deloitte & Touche, along with Dow Jones, Refco, Cargill and others, have returned to One World Financial Center. One Liberty Plaza is currently 75% reoccupied. OPERATING HIGHLIGHTS Brookfield achieved its financial and operating objectives year to date despite a more difficult leasing environment and increased sublet sub·let tr.v. sub·let, sub·let·ting, sub·lets 1. To rent (property one holds by lease) to another. 2. To subcontract (work). n. space in most markets. Brookfield's long-term lease profile and minimal lease maturities over the next few years, as well as below-market embedded Inserted into. See embedded system. rents, insulated in·su·late tr.v. in·su·lat·ed, in·su·lat·ing, in·su·lates 1. To cause to be in a detached or isolated position. See Synonyms at isolate. 2. the company from most of this impact on performance in the last six months, and will stand the company well in the years ahead. During the second quarter of 2002, Brookfield: -- Increased commercial operating income by 6%. During the second quarter of 2002, net operating income from commercial property operations, before lease termination income and gains, increased 6% to $152 million, compared with $143 million in 2001 after removing the impact of properties sold. Internal growth from the same properties owned last year accounted for virtually 100% of the increase. -- Leased approximately 600,000 square feet of space in the second quarter of 2002, despite a generally slower leasing environment. This increased total year to date leasing to 1.1 million square feet. Notable transactions included a recently completed lease renewal for 112,000 square feet with Duke Energy at Republic Plaza in Denver. This transaction involved a partial restacking of the building, which will facilitate the further renewal of additional tenants in the building totaling 75,000 square feet. Other transactions included AGF Management Ltd. leasing 231,000 square feet in Toronto, Folksamerica leasing 41,000 square feet at One Liberty Plaza, and a further 47,000 square feet leased to Noranda Inc. in Toronto. Subsequent to June 30, 2002, EnCana Corporation, a major Canadian integrated oil and gas company, leased 200,000 square feet at Bankers Hall, further enhancing the value of this premier asset. -- Increased contribution from residential property operations to $26 million in the second quarter, an increase of 13% over 2001. These operations continued to benefit from the low interest rate environment, fueling consumer demand for new homes across North America. Residential property operations have achieved 100% of expected sales for 2002 at this point in time, and sales for 2003 are now being booked. -- Continued return of New York tenants. Merrill Lynch has fully occupied Four World Financial Center with 7,000 employees. The repopulation of Two World Financial Center continues, presently at 70%, including 1,500 Merrill Lynch employees. American Express is in the process of consolidating its 4,000 employees at Three World Financial Center, which is expected to be complete by September. Deloitte & Touche, along with Dow Jones, Refco, Cargill and others, have returned to One World Financial Center. One Liberty Plaza is currently 75% reoccupied. OUTLOOK "As we look to the balance of the year and beyond, we remain focused on owning, developing and managing premier office properties in select, supply constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. , high growth office markets. Through disciplined asset and capital management, we are committed to increasing our return on capital and maintaining growth in funds from operations per share," said Clark. Brookfield Properties Corporation, with over US$8 billion in assets, owns, develops and manages premier North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. office properties. Brookfield also operates real estate service businesses and develops residential master-planned communities. The Brookfield portfolio spans 50 commercial properties and development sites totaling 44 million square feet and over 120 million square feet under management. Brookfield is inter-listed on the 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 and Toronto Stock Exchanges Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol BPO. For more information, visit the Brookfield Properties website at www.brookfieldproperties.com. Note: This press 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 27A of 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 achievement expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Factors that could cause actual results to differ materially from those set forward in the forward-looking statements include general economic conditions, local real estate conditions, timely re-leasing of occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. square footage upon expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created , 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 40-F filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
CONSOLIDATED BALANCE SHEET
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unaudited Jun. 30 Dec. 31 Dec. 31
(US Millions) 2002 2001 2000
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Assets
Commercial properties $5,767 $5,749 $6,326
Development properties 852 724 637
Residential housing
inventory 677 618 559
Receivables and other 764 789 893
Cash and cash equivalents 159 196 209
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$8,219 $8,076 $8,624
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Liabilities
Commercial property debt $4,571 $4,606 $4,702
Advances and residential
construction financing 561 559 951
Accounts payable 341 269 368
Shareholders' interests
Interests of others in
properties 126 113 159
Preferred shares -
corporate and
subsidiaries 601 585 607
Convertible debentures - - 50
Common shares 2,019 1,944 1,787
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$8,219 $8,076 $8,624
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CONSOLIDATED STATEMENT OF INCOME
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unaudited Three months ended Six months ended
(US Millions, June 30 June 30
except per share amounts) 2002 2001 2000 2002 2001 2000
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Total Revenue $536 $567 $493 $1,044 $1,047 $888
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Net Operating Income
Commercial property
operations
Operating income from
current properties $152 $143 $129 $299 $283 $251
Operating income from
properties sold - 12 18 3 31 37
Lease termination income
and gains - 30 19 40 55 19
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Total commercial property
operations 152 185 166 342 369 307
Development and
residential income 26 23 19 43 38 31
Interest and other 9 9 8 21 21 22
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187 217 193 406 428 360
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Expenses
Interest expense 72 86 79 145 172 155
Administrative and
development 12 11 12 23 23 23
Interests of others in
properties 5 7 13 15 15 25
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Funds From Operations and
Gains 98 113 89 223 218 157
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Depreciation and
amortization 19 19 16 38 37 30
Taxes and other non-cash
items 19 20 24 45 47 42
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Net Income $60 $74 $49 $140 $134 $85
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Funds From Operations Per
Share - Diluted
FFO per share - prior to
lease termination income
and gains $0.57 $0.51 $0.42 $1.10 $0.98 $0.83
Lease termination income
and gains - 0.15 0.11 0.21 0.29 0.11
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$0.57 $0.66 $0.53 $1.31 $1.27 $0.94
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Net Income Per Share -
Diluted
Net income - prior to
lease termination income
and gains $0.33 $0.30 $0.20 $0.63 $0.54 $0.40
Lease termination income
and gains - $0.13 $0.08 0.17 0.22 0.08
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$0.33 $0.43 $0.28 $0.80 $0.76 $0.48
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