Brookfield Investments Corporation Announces 2008 Fourth Quarter Financial Results TORONTO, ONTARIO--(MARKET WIRE)--Mar 31, 2009 -- Brookfield Investments Corporation (Toronto:BRN-PA.TO - News) today
reported net income for the year ended December 31, 2008
of $55 million, compared to a net loss of $72 million for
2007. The results for 2008 reflect other income of $198
million, as described further below, partly offset by an
$81 million net loss from the company's forest product investments.
Net loss for the three months ended December 31, 2008 was $5 million, compared to a loss of $14 million in the same period of 2007. The net loss in the fourth quarter of 2008 reflects the gain in revaluation of the Norbord exchangeable debentures, offset by the loss contributed by the company's forest product investments. Panelboard investments, held through Norbord Inc. ("Norbord"), contributed a net loss of $45 million for the 2008, compared with a net loss of $18 million for 2007, as a result of weak housing markets and higher input prices. Other forest product investments, held through Fraser Papers Inc., contributed a net loss of $36 million, compared to a net loss of $21 million in 2007 which included one-time restructuring charges partly offset by a gain on the sale of Fraser Papers' interest in the Acadian Timber Income Fund. Improvements during 2008 at paper operations were more than offset by maintenance outages and weak lumber and pulp markets. Dividend and interest income for 2008 was $69 million, up from $33 million last year due mainly to the $31 million interim dividend declared by the Canary Wharf Group, plc ("Canary Wharf") in the first quarter of 2008. Other income for 2008 was $129 million, up from $18 million last year due mainly to the following factors. In the second quarter, the company settled exchangeable debentures with 10 million common shares of Norbord, thereby decreasing its ownership interest in Norbord from 42% to 35% and resulting in a gain of $65 million. The company also recorded $64 million of revaluation gains as a result of the corresponding revaluation of the remaining debentures. In December 2008, the company's interest in Norbord declined further to 23% as a result of not participating in a Norbord rights offering. Also in December 2008, the company sold its 15% indirect interest in the Canary Wharf to Brookfield Europe L.P., a subsidiary of Brookfield Asset Management Inc. As consideration, the company received a 42% limited partnership interest in Brookfield Europe L.P. valued at (pound)334 million and cash proceeds in the amount of (pound)108 million. The company recorded the transaction at the carrying value of its investment in Canary Wharf. The company's Board of Directors has declared a quarterly dividend on its Class I Senior Preferred Shares, Series A of C$0.29375 per share, payable on March 31, 2009 to shareholders of record on March 20, 2009. Brookfield Investments Corporation holds investments in the forest products and property sectors, as well as a portfolio of preferred shares issued by companies within the Brookfield group. The common shares of Brookfield Investments Corporation are wholly owned by Brookfield Asset Management Inc., a global asset manager focused on property, power and infrastructure assets. Sachin Shah, Vice President and Chief Financial Officer, will be available at 416-363-9491 to answer any questions on the company's financial results.
CONSOLIDATED BALANCE SHEETS
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As at December 31, US$ millions, (unaudited) 2008 2007
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Assets
Loans receivable $ 341 $ 230
Securities 255 294
Investment in Brookfield Properties Corporation 143 357
Investment in Fraser Papers Inc. 124 129
Investment in Norbord Inc. 103 181
Investment in Brookfield Europe L.P. 96 -
Investment in Canary Wharf Group, plc - 256
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$ 1,062 $ 1,447
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Liabilities
Accounts payable $ 30 $ 162
Retractable preferred shares 681 708
Shareholders' equity 351 577
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$ 1,062 $ 1,447
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CONSOLIDATED STATEMENT OF OPERATIONS
Three months ended Years ended
December 31 December 31
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US$ millions, except per share
amounts, (unaudited) 2008 2007 2008 2007
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Income
Equity loss from Norbord Inc. $ (11) $ (6) $ (45) $ (18)
Equity loss from Fraser Papers Inc. (8) (10) (36) (21)
Equity income from Brookfield Europe
L.P. 1 - 1 -
Foreign exchange gain (loss) 1 2 6 (45)
Dividend and interest income 9 9 69 33
Other income 29 1 129 18
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21 (4) 124 (33)
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Expenses
Interest 7 10 36 38
Corporate 1 - 1 1
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8 10 37 39
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Net income before taxes 13 (14) 87 (72)
Income tax expense (18) - (32) -
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Net (loss) income $ (5) $ (14) $ 55 $ (72)
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Net (loss) income per common share $ (0.12) $ (0.29) $ 1.19 $ (1.55)
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CONSOLIDATED STATEMENTS OF DEFICIT
Three months ended Years ended
December 31 December 31
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US$ millions, (unaudited) 2008 2007 2008 2007
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Deficit, beginning of period $ (286) $ (333) $ (347) $ (267)
Change in accounting policy - - 1 (8)
Net (loss) income (5) (14) 55 (72)
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Deficit, end of period $ (291) $ (347) $ (291) $ (347)
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CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Years ended
December 31 December 31
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US$ millions, (unaudited) 2008 2007 2008 2007
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Cash Flow from (used in) operating
activities
Net income (loss) $ (5) $ (14) $ 55 $ (72)
Adjusted for the following
non-cash items
Excess of dividends received over
equity losses 22 22 101 61
Net change in non-cash working
capital balances (10) (21) (102) 28
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7 (13) 54 17
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Cash Flow used in financing activities
Share redemption - - - (101)
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- - - (101)
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Cash Flow from (used in) investing
activities
Investment in Fraser Papers Inc. - - (29) (1)
Investment in Norbord Inc. (5) (6) (22) (42)
Net proceeds on sale of Canary Wharf 158 - 158 -
Loans receivable (160) 19 (161) 127
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(7) 13 (54) 84
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Net change and closing cash balance $ - $ - $ - $ -
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----------------------------------------------------------------------------Contact: Contacts:
Brookfield Investments Corporation
Sachin Shah
Vice President and Chief Financial Officer
416-363-9491
Source: Brookfield Investments Corporation
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