Brascan Corporation
TSX : BAM
NYSE : BAM

Brascan Corporation

November 03, 2005 08:22 ET

Brookfield Asset Management Reports Third Quarter Net Income of US$736 Million

TORONTO, ONTARIO--(CCNMatthews - Nov. 3, 2005) - Brookfield Asset Management Inc. (currently Brascan Corporation) (TSX:BAM)(NYSE:BAM)

Investors, analysts and other interested parties can access Brookfield Asset Management's 2005 Third 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 Third Quarter Results conference call can be accessed via webcast on November 3, 2005 at 3:00 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 2:50 p.m. EST. The teleconference taped rebroadcast can be accessed at 1-800-807-5189.

CASH FLOW FROM OPERATIONS PER SHARE INCREASES TO $286 MILLION

Brookfield Asset Management Inc. (currently Brascan Corporation) (TSX:BAM)(NYSE:BAM) today announced operating results for the third quarter ended September 30, 2005. Net income totalled $736 million ($2.73 per share) compared with $133 million ($0.49 per share) in the same period last year, and includes a gain on the sale of our remaining investment in Falconbridge of $636 million after tax.

Operating cash flow, which excludes a gain on the sale of our Falconbridge shares, for the three months ended September 30, 2005 totalled $286 million ($1.04 per share) compared with $188 million ($0.70 per share) last year.

The following table presents the results on a total and per share basis.



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Three months ended Nine months ended
Sept. 30 Sept. 30
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US$ millions
(except per share amounts) 2005 2004 2005 2004
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Net income $ 736 $ 133 $ 1,511 $ 468

- per share $ 2.73 $ 0.49 $ 5.58 $ 1.73

Cash flow from operations $ 286 $ 188 $ 656 $ 493

- per share $ 1.04 $ 0.70 $ 2.37 $ 1.83
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Bruce Flatt, Chief Executive Officer of Brookfield Asset Management 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 disposition of our investment in Falconbridge significantly increased our liquidity and represents the culmination of our plan to monetize our resource investments."

Dividend Declaration

On November 2, 2005, the Board of Directors declared a regular dividend of US$0.15 per Class A Share, payable on February 28, 2006, to shareholders of record as at the close of business on February 1, 2006.

Information on Brookfield Asset Management's common and preferred share dividends can be found on the company's web site under Investor Centre/Stock Information.

Corporate Activities

A special meeting of shareholders will be held on November 10, 2005 to consider a resolution to change the name of the company to Brookfield Asset Management Inc. This will enable the company to operate under one unified name across our operations. In addition, the currently outstanding offer to repurchase up to $500 million of common shares at $41.00 per share will expire on November 9, 2005.

Additional Information

The Letter to Shareholders and the company's Supplemental Financial Information for the nine months ended September 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.

Brookfield Asset Management Inc. (currently Brascan Corporation) is a specialist asset manager. Focused on property, power and infrastructure assets, the company has approximately $40 billion of assets under management. The company is co-listed on the New York and Toronto Stock Exchanges. For more information, please visit our web site at www.brascancorp.com.



CONSOLIDATED STATEMENT OF INCOME

---------------------------------------------------------------------
(Unaudited) Three months ended Nine months ended
Sept. 30 Sept. 30
US$ millions, except per
share amounts 2005 2004(a) 2005 2004(a)
---------------------------------------------------------------------
Total revenues $ 1,368 $ 994 $ 3,516 $ 2,600
-----------------------------------------
Net operating income
Property 277 241 769 677
Power generation 98 68 361 213
Funds management 57 46 225 165
Investment income 39 17 72 38
Gains and other 41 67 67 148
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512 439 1,494 1,241
Expenses
Interest expense 218 154 652 454
Current income taxes 28 16 74 40
Other operating costs 21 22 68 53
Minority share of net
income before the following 74 74 235 248
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171 173 465 446
Other items
Equity accounted income
from investments 34 79 210 270
Gains on disposition of
Falconbridge 785 - 1,350 -
Depreciation and
amortization (102) (60) (271) (172)
Future income taxes and
other provisions (180) (107) (329) (193)
Minority share of the
foregoing items 28 48 86 117
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Net income $ 736 $ 133 $ 1,511 $ 468
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Net income per common share
Diluted $ 2.73 $ 0.49 $ 5.58 $ 1.73
Basic $ 2.80 $ 0.50 $ 5.72 $ 1.75
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CONSOLIDATED STATEMENT OF CASH FLOW FROM OPERATIONS

---------------------------------------------------------------------
(Unaudited) Three months ended Nine months ended
Sept. 30 Sept. 30
US$ millions 2005 2004(a) 2005 2004(a)
---------------------------------------------------------------------
Income before
non-cash items(1) $ 171 $ 173 $ 465 $ 446
Dividend from Canary Wharf 110 - 110 -
Dividends from Falconbridge - 11 24 33
Dividends from Norbord 5 4 57 14
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Cash flow from operations $ 286 $ 188 $ 656 $ 493
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(1) Net operating income less expenses
(a) See accompanying notes on following page


CONSOLIDATED BALANCE SHEET

---------------------------------------------------------------------
(Unaudited) (Unaudited)
September 30 June 30 December 31
US$ millions 2005 2005 2004(2)
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Assets
Operating assets
Property $ 10,334 $ 10,217 $ 9,289
Power generation 3,636 3,520 3,048
Funds management 4,926 5,538 4,719
-----------------------------------
18,896 19,275 17,056
Cash and cash equivalents 1,244 674 404
Securities 2,391 1,731 996
Accounts receivable and other 3,683 3,199 1,551
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$ 26,214 $ 24,879 $ 20,007
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Liabilities and Shareholders' Equity
Liabilities
Corporate borrowings $ 1,685 $ 1,832 $ 1,675
Non-recourse borrowings
Property specific mortgages 8,112 7,865 6,045
Other debt of subsidiaries 2,481 2,544 2,373
Accounts payable and other
liabilities 5,086 4,576 2,719
Capital securities(2) 1,598 1,513 1,548
Minority interests of others
in assets 2,076 2,087 1,780
Preferred equity 590 590 590
Common equity 4,586 3,872 3,277
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$ 26,214 $ 24,879 $ 20,007
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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 Brookfield Asset Management'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 statutory financial statements.

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.

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