EX-99.1 2 ex99_1.htm BRASCAN REPORTS SECOND QUATER NET INCOME BRASCAN REPORTS SECOND QUATER NET INCOME
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NEWS RELEASE
 
 
Investors, analysts and other interested parties can access Brascan’s 2005 Second Quarter Results as well as the Shareholders’ Letter and Supplemental Financial Information on Brascan’s web site
under the Investor Centre/Financial Reports and Investor Presentations section at www.brascancorp.com.
 
The 2005 Second Quarter Results conference call can be accessed via webcast on August 4, 2005 at 2:30 p.m. EST at www.brascancorp.com or via teleconference at 1-800-240-5124, toll free in North America. For overseas calls please dial 507-726-3566, at approximately 2:20 p.m. EST. The teleconference taped rebroadcast can be accessed at 1-800-807-5189.
 

 
BRASCAN REPORTS SECOND QUARTER NET INCOME OF US$610 MILLION
 
CASH FLOW FROM OPERATIONS PER SHARE INCREASED 28%
 

TORONTO, August 4, 2005 - Brascan Corporation (TSX/NYSE: BNN) today announced operating results for the second quarter ended June 30, 2005. Net income totalled $610 million ($2.26 per share) compared with $190 million ($0.71 per share) in the same period last year. Results for the current quarter include $448 million in gains from the restructuring and partial monetization of Brascan’s investment in Falconbridge, net of taxes and other non-cash items. Net income for the first half of the year totalled $775 million compared with $335 million for the same period last year.
 
Operating cash flow, before the Falconbridge gain, for the three months ended June 30, 2005 totalled $229 million ($0.82 per share) compared with $169 million ($0.64 per share) last year, representing growth of 28% on a per share basis. For the first six months, cash flow increased by 26% to $385 million from $305 million last year.
 
The following table presents the results on a total and per share basis.
 
 
Three months ended June 30
  Six months ended June 30
US$ millions (except per share amounts)
2005
2004
2005
2004
 
Net income
 
$610
 
$190
 
$775
 
$335
- per share
 
$2.26
 
$0.71
 
$2.85
 
$1.24
 
Cash flow from operations
 
$229
 
$169
 
$385
 
$305
 
- per share
 
$0.82
 
$0.64
 
$1.38
 
$1.13

Bruce Flatt, Chief Executive Officer of Brascan commented: “Our core operations in property, power and infrastructure assets performed in line with expectations and we are well positioned to generate additional growth in operating cash flows for the balance of the year. The gain on our investment in Falconbridge represents another step in the monetization of our resource investments over time.”
 
Brascan Corporation 
2005 Second Quarter Results
1
 
Dividend Declaration
On August 3, 2005, the Board of Directors declared a regular dividend of US$0.15 per Class A Share, payable on November 30, 2005, to shareholders of record as at the close of business on November 1, 2005.
 
Information on Brascan’s common and preferred share dividends can be found on Brascan’s web site under Investor Centre/Stock Information.
 
 
Additional Information
The Letter to Shareholders and the company’s Supplemental Financial Information for the six months ended June 30, 2005 contains further information on the company’s strategy, operations and financial results. Shareholders are encouraged to read these documents, which are available on the company’s web site.
 
 
 
Brascan Profile
Brascan Corporation is a global asset manager focused on property, power and infrastructure assets. With $40 billion of assets under management, the company owns 70 premier office properties and over 130 power generating plants. The company is inter-listed on the New York and Toronto stock exchanges.

 
For more information, please visit our web site at www.brascancorp.com or contact:
 
Katherine C. Vyse
Senior Vice-President
Investor Relations and Communications
Tel: 416-369-8246 e-mail: kvyse@brascancorp.com 
 
Brascan Corporation 
2005 Second Quarter Results
2
 
 
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
 
Three months ended June 30
Six months ended June 30
 
US$ millions, except per share amounts
2005 
2004*
2005
2004*
 
Total revenues and gains
 
$
 
1,769 
 
$
 
898 
 
 
 
$                   2,744 
 
$
 
1,666 
 
Net operating income
                
 
Property
  
 
264 
  
 
222 
  
 
492 
  
 
436 
 
Power generation
 
122 
 
71 
 
263 
 
145 
 
Funds management
 
104 
 
65 
 
168 
 
119 
 
Investment income and other gains
 
58 
 
77 
 
90 
 
102 
548 
435 
1,013 
802 
 
Expenses
        
 
Interest expense
 
235 
 
153 
 
434 
 
300 
 
Current income taxes
 
30 
 
16 
 
46 
 
24 
 
Other operating costs
 
20 
 
13 
 
47 
 
31 
 
Minority share of net income before the following
 
78 
 
100 
 
161 
 
174 
185 
153 
325 
273 
 
Other items
        
 
Equity accounted income from investments
 
73 
 
95 
 
176 
 
191 
 
Gain on reorganization of Falconbridge
 
 
565 
 
¾ 
 
565 
 
¾ 
Depreciation and amortization
(92)
(56)
(169)
(112)
 
Future income taxes and other provisions
 
(151)
 
(42)
 
(180)
 
(86)
 
Minority share of the foregoing items
 
30 
 
40 
 
58 
 
69 
 
Net income
 
$
 
610 
 
$
 
190 
 
$
 
775 
 
$
 
335 
 
Net income per common share
                
 
Diluted
 
$
 
2.26 
 
$
 
0.71 
 
$
 
2.85 
 
$
 
1.24 
 
Basic
 
$
 
2.31 
 
$
 
0.71 
 
$
 
2.92 
 
$
 
1.25 
 

CONSOLIDATED STATEMENT OF CASH FLOW FROM OPERATIONS
(Unaudited)
 
Three months ended June 30
Six months ended June 30
 
US$ millions
2005 
2004*
2005 
2004*
 
Income before non-cash items1
 
$
 
185 
 
$
 
153 
 
$
 
325 
 
$
 
273 
 
Dividends from Falconbridge
  
 
12 
  
 
11 
  
 
24 
  
 
22 
 
Dividends from Norbord
 
 
32 
  
 
5 
  
 
36 
  
 
10 
 
Cash flow from operations
 
$
 
229 
 
$
 
169 
 
$
 
385 
 
$
 
305 
 
1 Net operating income less expenses
* See accompanying notes on following page
 
Brascan Corporation 
2005 Second Quarter Results
3
 
CONSOLIDATED BALANCE SHEET
 
(Unaudited)
June 30
  
December 31
  
US$ millions
    
2005
    
20042
  
Assets
Operating assets
              
 
Property
  
$
10,217
  
$
9,289
  
 
Power generation
    
3,520
    
3,048
  
 
Funds management
   
5,538
    
4,719
  
     
19,275
    
17,056
  
 
Cash and cash equivalents
   
674
    
404
  
 
Securities
   
1,731
    
996
  
 
Accounts receivable and other
    
3,199
    
1,551
  
   
$
24,879
  
$
20,007
  
Liabilities and Shareholders’ interests
Liabilities
              
 
Corporate borrowings
  
$
1,832
  
$
1,675
  
 
Non-recourse borrowings
              
 
Property specific mortgages
    
7,865
    
6,045
  
 
Other debt of subsidiaries
    
2,544
    
2,373
  
 
Accounts payable and other liabilities
    
4,576
    
2,719
  
 
Capital securities2
    
1,513
    
1,548
  
 
Shareholders’ interests
 
              
 
Minority interests of others in assets
    
2,087
    
1,780
  
 
Preferred equity
    
590
    
590
  
 
Common equity
    
3,872
    
3,277
  
   
$
24,879
  
$
20,007
  
 
Note 1
The press release and accompanying consolidated financial statements make reference to cash flow from operations on a total and per share basis. Management uses cash flow from operations as a key measure to evaluate performance and to determine the underlying value of its businesses. The consolidated statement of cash flow from operations provides a full reconciliation between this measure and net income. Readers are encouraged to consider both measures in assessing Brascan’s results. In addition, the consolidated balance sheet above presents the company’s cost accounted investment in Canary Wharf Group, plc as part of its property operations, consistent with management’s determination of business segments, whereas it is included in “Funds Management” in the company’s interim report to shareholders.
 
Note 2
Certain convertible preferred shares and preferred securities have been reclassified as capital securities in accordance with changes in accounting guidelines. This has also resulted in conforming changes to dividends paid, interest expense, foreign exchange gains and retained earnings.
 
 
Note: This press release and attachments contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, 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 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, interest rates, availability of equity and debt financing 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.
 
 
 
Brascan Corporation
2005 Second Quarter Results
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