Brookfield Asset Management Announces Strong 2008 Third Quarter Results
biz.yahoo.com
Cash flow from operations for the third quarter totalled $355 million ($0.58 per share). Operating cash flow in the same quarter in 2007 was $255 million ($0.40 per share) on a comparable basis, which excludes a security disposition gain of $66 million, or $321 million ($0.52 per share) including the gain. On a comparable basis, operating cash flow per share increased by 45% quarter-over-quarter due to improved water levels and pricing in the company's renewable power business and an increased contribution from our commercial office business.
"In the last few months we increased our overall cash holdings and liquidity to more than $3.5 billion, most of that at the Brookfield corporate level. This is one of the highest levels of liquidity we have ever held, but given uncertainty in the markets we want to be prepared for the unknowns, and opportunities which may present themselves in this environment. In addition, our operating performance in the quarter reflected the durability of our cash flows, most of which are supported by long-term contractual arrangements with credit-worthy counterparties, the high quality of our asset base and operating platforms, and the stability of our long duration investment grade capitalization," commented Bruce Flatt, Senior Managing Partner of Brookfield Asset Management. "While we are exercising caution during these turbulent times, and preserving a high level of liquidity, we are exploring a number of potential opportunities to expand our operating platforms and create additional shareholder value."
In the past months, the company completed the following capital raising initiatives:
- Formed an investment fund in October 2008, managed by Brookfield, into which a portion of the company's U.S. Pacific Northwest freehold timberlands were sold. Brookfield retains an approximate 40% direct and indirect interest in the timberlands. Total proceeds were $1.2 billion, generating net cash proceeds to Brookfield of approximately $600 million, and will result in a modest gain that will be recorded in the fourth quarter.
- Closed the sale of the company's Lloyds Insurance business and committed to sell the U.S. property and casualty business, which will generate gross proceeds of approximately $310 million and net proceeds of approximately $150 million prior to year end.
- Sold a group of transmission lines in Brazil for $275 million net cash proceeds, which is to close in early 2009.
- Closed the sale of a 50% interest in the Canada Trust Tower office property in Toronto for C$425 million, generating net proceeds after debt repayment of approximately $200 million.
- Completed $1 billion of financings, including issuing $150 million of corporate debt with a 4.5 year term and a 6.5% blended coupon, and $850 million of property-specific financings.
Net Income
Net income was $171 million in the third quarter of 2008 compared with $93 million on the same basis last year. Increases in operating cash flows were offset by a higher level of non-cash charges, including depreciation on assets purchased since the second quarter of 2007. In the company's view, these assets should generate increasing cash flows over an extended period of time due to their high quality, long life and value appreciation potential. |
