Brascade Corporation
TSX : BCA.PR.A

March 30, 2007 17:41 ET

Brascade Announces Fourth Quarter Financial Results

TORONTO, ONTARIO--(CCNMatthews - March 30, 2007) - Brascade Corporation (TSX:BCA.PR.A) today announced net income for the year ended December 31, 2006 of $169 million, compared to $1,285 million for 2005. The 2006 results include a gain of $142 million on the disposition of Brascade's remaining common shares in Falconbridge Limited.

The 2005 results included $1,160 million in gains from the restructuring and partial monetization of Brascade's investment in the mining and metal sector, held through Falconbridge Limited, net of tax and other non-cash items. The 2005 results also included an $87 million contribution from that investment, which was substantially sold during the third quarter of 2005. Following the sale of substantially all of Brascade's interest in Falconbridge in August 2005, the company no longer records any equity income from mining and metals investments.

During the third quarter of 2006, the company converted Cdn. $75 million Falconbridge convertible debentures at a conversion price of Cdn. $27.55 per common share to 2,722,323 Falconbridge common shares. This conversion increased the number of Falconbridge common shares owned by the company to approximately 4.0 million. Following this conversion, the company tendered all its Falconbridge common shares to the offer made by Xstrata plc for Cdn. $62.50 per share, for approximately $226 million in proceeds and a gain of $142 million.

Forest product investments contributed a net loss of $16 million for 2006, compared with income of $74 million for 2005. Panelboard investments contributed income of $37 million, which was a strong performance but lower than 2005 as oriented strandboard prices came off their record high levels. Paper investments generated a loss of $53 million, arising mainly from closure of a pulp mill in New Hampshire and the writedown of an investment in a US paper company.

Net income for the three months ended December 31, 2006 was $4 million, compared to net income of $9 million in the same period in 2005, due primarily to a lower contribution from panelboard investments during the fourth quarter of 2006.

As previously announced, Brascade amalgamated with Diversified Canadian Financial II Corp. and Diversified Canadian Holdings Inc. on January 1, 2007, and continues under the name Brascade Corporation. The financial impact of this amalgamation will be reflected in Brascade's results for the first quarter of 2007.

The company's Board of Directors has declared the initial quarterly dividend on its Senior Preferred shares, Series A of C$0.290486 per share, payable on March 31, 2007 to shareholders of record on March 20, 2007.

Brascade Corporation holds investments in the forest products and property sectors, as well as a portfolio of preferred shares issued by companies within the Brookfield Asset Management group. The common shares of Brascade are wholly owned by Brookfield Asset Management, an asset management company focussed on property, power and infrastructure assets.

This news release contains forward-looking statements concerning the company's business and operations such as "will", "is expected" and "should". The company cautions that, by their nature, forward-looking statements involve risk and uncertainty and the company's actual results could differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Information Form for a description of the major risk factors.



Consolidated Statements of Operations
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(unaudited) Three months ended Year ended
US$ millions, except December 31 December 31
per share amounts 2006 2005 2006 2005
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Income
Equity income from Falconbridge
Limited $ - $ - $ - $ 87.0
Equity income from Norbord Inc. - 19.4 36.6 87.2
Equity loss from Fraser Papers
Inc. (5.5) (10.1) (53.0) (13.2)
Foreign exchange gain (loss) 16.2 3.4 5.0 (10.6)
Other income 3.0 5.4 93.9 32.7
Gain on disposition of investment - - 141.6 1,159.7
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13.7 18.1 224.1 1,342.8
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Expenses
Interest expense 9.1 9.1 54.2 57.9
Corporate 0.4 - 1.0 0.2
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9.5 9.1 55.2 58.1
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Net income $ 4.2 $ 9.0 $ 168.9 $1,284.7
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Net income per common share $ 0.09 $ 0.20 $ 3.67 $ 38.05
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Consolidated Statements of Deficit
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Three months ended Year ended
(unaudited) December 31 December 31
US$ millions 2006 2005 2006 2005
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Defi cit, beginning of
period $ (271.6) $ (340.3) $ (331.3) $ (1,008.8)
Purchase of Falconbridge
shares - - - (332.2)
Net income for the period 4.2 9.0 168.9 1,284.7
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(267.4) (331.3) (162.4) (56.3)
Common share dividend - - (105.0) (275.0)
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Deficit, end of period $ (267.4) $ (331.3) $ (267.4) $ (331.3)
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Consolidated Balance Sheets
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December 31 December 31
US$ millions 2006 2005
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Assets
Loans receivable $ 205.1 $ 214.8
Securities 167.4 434.9
Investment in Norbord Inc. 177.5 199.3
Investment in Fraser Papers Inc. 149.5 196.9
Investment in Canary Wharf Group, plc 256.2 342.3
Investment in Brookfi eld Properties Corporation 470.3 -
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$ 1,426.0 $ 1,388.2
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Liabilities
Accounts payable $ 156.2 $ 217.4
Retractable preferred shares 476.6 478.2
Shareholders' equity 793.2 692.6
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$ 1,426.0 $ 1,388.2
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Contact Information

  • Brascade Corporation
    Sachin Shah
    Vice President and Chief Financial Officer
    (416) 363-9491