Brookfield Asset Management Announces First Quarter Results and Shareholder Initiatives
biz.yahoo.com
Wednesday May 2, 8:00 am ET
TORONTO, ONTARIO--(MARKET WIRE)--May 2, 2007 -- Brookfield Asset Management Inc. (Toronto:BAM.TO)(NYSE:BAM) -
Investors, analysts and other interested parties can access Brookfield Asset Management's 2007 First Quarter Results as well as the Shareholders' Letter and Supplemental Financial Information on Brookfield's web site under the Investor Centre/Financial Reports section at brookfield.com.
The First Quarter 2007 Results conference call can be accessed via webcast on May 2, 2007 at 11:00 a.m. EST at brookfield.com or via teleconference at 1-877-356-9134 toll free in North America. For overseas calls please dial 1-706-902-0751, at approximately 10:50 a.m. EST. The teleconference taped rebroadcast can be accessed at 1-800-558-5253 or 416-626-4100 (Reservation # 21335898).
Brookfield Asset Management Inc. (Toronto:BAM.TO - News)(NYSE:BAM) today announced:
- First quarter cash flow from operations of $571 million or $1.40 per share compared with $307 million or $0.75 in 2006;
- A three-for-two stock split, which will be implemented by way of a stock dividend;
- The proposed listing of the company's Class A Shares on Euronext; and
- The proposed distribution to shareholders, by way of a special dividend, of a direct interest in its infrastructure operations through Brookfield Infrastructure Partners, a new publicly traded limited partnership.
First Quarter Results
In the first quarter ended March 31, 2007 cash flow from operations totalled $571 million ($1.40 per share), compared with $307 million ($0.75 per share) reported in the same quarter last year. Net income totalled $195 million ($0.46 per share) compared with $179 million ($0.43 per share) reported in the same period last year.
The following table presents the results on a total and per share basis.
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Three months ended March 31
US$ millions (except per share amounts) 2007 2006
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Cash flow from operations $ 571 $ 307
- per share $ 1.40 $ 0.75
Net income $ 195 $ 179
- per share $ 0.46 $ 0.43
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Bruce Flatt, Managing Partner of Brookfield Asset Management, commented: "Our results this quarter reflect strong performance in most of our operations. We remain focused on enhancing shareholder value and building out each of our operating platforms to enable us to achieve our long-term goals. The spin-off of Brookfield Infrastructure Partners is a major step in this direction, as it will provide investors with an attractive focused infrastructure vehicle, facilitating access to the capital markets to fund our infrastructure growth plans."
Three-for-Two Stock Split
On May 1, 2007, the Board of Directors approved a three-for-two stock split of the company's outstanding Class A Shares. The split will be implemented by way of a stock dividend whereby shareholders will receive one-half of a Brookfield Class A Share for each Class A and Class B Share held (i.e. one additional share for every two shares held). Fractional shares will be paid in cash at the prevailing market price. The stock dividend will be payable on or about June 1, 2007 to shareholders of record at the close of business on May 24, 2007.
Brookfield is undertaking the stock split to ensure the shares remain accessible to individual shareholders and to improve the liquidity of the shares. The split will have no unfavourable tax consequences in Canada or the United States, and will not dilute shareholders' equity. The number of shares subject to the company's current normal course issuer bid will be adjusted upwards to reflect the stock split.
Euronext Listing
With the recent merger of NYSE and Euronext, as well as Brookfield's continued global expansion, Brookfield intends to seek a listing for the company's Class A Shares on Euronext to provide Brookfield with greater access to European and other global investors.
Distribution of Infrastructure Assets
Brookfield intends to distribute to its Class A shareholders a direct interest in its infrastructure operations through a newly created publicly traded partnership to be named Brookfield Infrastructure Partners L.P. ("Brookfield Infrastructure"). Brookfield Infrastructure's initial operations will be principally comprised of interests in Brookfield's electricity transmission and timber businesses. Brookfield Infrastructure will serve as the primary vehicle through which Brookfield's future infrastructure related acquisitions, other than property and renewable power operations, will be made.
Brookfield will retain an approximate 40% interest in Brookfield Infrastructure and will manage the operations under a long term management agreement.
Brookfield Infrastructure intends to seek a listing for its units on the New York Stock Exchange. Further details regarding the operations of Brookfield Infrastructure will be set forth in regulatory filings which Brookfield intends to submit to securities regulatory authorities in the United States and Canada during the second quarter.
Subject to receipt of the various required approvals, Brookfield will implement the spin-off by way of a special dividend currently estimated to be approximately US$1.00 per Brookfield Class A Share, taking into account the pending three-for-two stock split, or approximately $600 million in aggregate. The record date for, and the exact amount of, the dividend will be established at the time that regulatory filings are finalized, which is expected to be during the third quarter.
Brookfield believes the spin-off will:
- accelerate Brookfield's strategy to build out its asset management platform through creation of a managed company with an effective cost of capital to support its infrastructure growth strategies;
- create a focused public vehicle that will be well-positioned for future infrastructure acquisitions; and
- surface the value of the Company's currently owned infrastructure assets for shareholders.
Brookfield Infrastructure will be focused on the ownership and operation of infrastructure assets that provide essential products and services, are long-life in nature, and are expected to produce stable cash flows that increase over time with inflation. The assets are expected to include, among others: electricity transmission, pipeline and utility distribution infrastructure; transportation infrastructure; social infrastructure (i.e. hospitals, schools) and timber assets. The partnership will not include property and renewable power operations. Through its management agreement with Brookfield Asset Management, Brookfield Infrastructure will be able to access Brookfield's proprietary deal flow, business development expertise and operating capabilities.
Given the strong global demand for high quality infrastructure assets, the scarcity of publicly-traded infrastructure companies, and Brookfield's long track record of success in owning and operating long-life, high-quality, cash flow generating assets, Brookfield believes that Brookfield Infrastructure will provide investors with a unique opportunity to participate more directly in the growth of this business and an attractive combination of current yield plus capital appreciation.
The completion of the distribution of Brookfield Infrastructure to Brookfield's shareholders is subject to satisfaction of a number of conditions and, as such, there can be no certainty that the distribution will proceed or proceed in the manner or in the amount set forth above.
Dividend Declaration
The Board of Directors declared a dividend of US$0.18 per Class A Share (on a pre-split basis), payable on August 31, 2007, to shareholders of record as at the close of business on August 1, 2007, as well as the regular monthly and quarterly dividends on its preferred shares. On a post-split basis, the dividend per Class A Share will be US$0.12. |
