Brookfield Asset Management Announces Fourth Quarter Realization Items and Third Quarter Results
biz.yahoo.com
Friday November 2, 8:00 am ET
TORONTO, ONTARIO--(MARKET WIRE)--Nov 2, 2007 -- Brookfield Asset Management Inc. (Toronto:BAM.TO - News)(NYSE:BAM - News) -
- two recently completed initiatives that will result in meaningful gains being recorded in the fourth quarter, covered in the following section; and
- the financial and operating results for the periods ending September 30, 2007, which are covered in the balance of the release and the attached financial statements.
Fourth Quarter Realization Items
On October 31, 2007, the company closed the sale of its shares of Stelco to U.S. Steel. Brookfield's Tricap Restructuring Fund was the largest shareholder of Stelco, having taken the company out of a formal restructuring process, and played a leadership role in the sale process. Brookfield realized proceeds of nearly eight times the original investment and expects to record a pre-tax gain of approximately $250 million in the fourth quarter of 2007.
Also on October 31, 2007, a secondary offering of the major Brazilian stock exchange (the "Bovespa") closed. The Bovespa was taken public through an initial public offering that raised $3.7 billion. Brookfield owned a number of seats on the Bovespa which were converted to common shares and monetized. Proceeds were approximately $160 million, and Brookfield expects to record a substantial gain in the fourth quarter of 2007.
Third Quarter Financial Results
"For the period ending September 30, 2007, we achieved our targets in most of our operations and exceeded expectations in some," said Brookfield Asset Management's Managing Partner, Bruce Flatt. "In particular, we achieved record results in our Canadian residential property operations and realized meaningful gains in our investment activities. Our results were impacted by lower generation levels within our power generation operations due to abnormally low water conditions, continued weakness in the U.S. housing markets, and an industry strike in the Canadian coastal forest products sector."
The company advanced a number of important transactions during the quarter, including the acquisition of Multiplex in Australia, the sale of a large restructuring fund investment and the refinancing of its One Liberty Plaza property in lower Manhattan.
Brookfield continues to expand its fee-bearing assets under management. At quarter end, base management fees, which are an important component of overall fee revenues, totalled approximately $90 million on an annualized basis. Furthermore, the company accumulated $82 million of additional performance fees and carried interests during the quarter, that were not recorded in the cash flows or net income of the company due to its current accounting conventions.
Flatt commented: "We continue to be on target this year to record the highest cash flows in our history." |
