Brookfield Investments Corporation
TSX : BRN.PR.A

August 14, 2008 16:31 ET

Brookfield Investments Corporation Announces Second Quarter Financial Results

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2008) - Brookfield Investments Corporation (TSX:BRN.PR.A) reported net income for the six months ended June 30, 2008 of $58 million, compared to a loss of $72 million for the same period last year. The results for the first half of 2008 reflect other income of $132 million, as described further below, partly offset by a $46 million net loss from the company's forest product investments.

Net income for the three months ended June 30, 2008 was $1 million compared to a net loss of $68 million in the same period of 2007 primarily as a result of the partial disposition of Norbord exchangeable debentures, as discussed below.

Panelboard investments, held through Norbord Inc., contributed a net loss of $28 million for the first six months of 2008, compared with a net loss of $12 million for the same period last year. Prices for oriented strandboard strengthened during the second quarter after dropping to their lowest levels since 2001 earlier in the year. Other forest product investments, held through Fraser Papers Inc., contributed a net loss of $18 million, compared to a net loss of $23 million last year which included a one-time restructuring charge. Improvements during the second quarter of 2008 at pulp and paper operations were more than offset by losses in lumber operations caused by weak lumber markets and high input prices.

Other income for the first six months of 2008 was $132 million, up from $7 million last year due mainly to the following factors. In the first quarter, the company received a $31 million interim dividend declared by Canary Wharf Group. In the second quarter, the company settled exchangeable debentures with 10 million common shares of Norbord, by decreasing its ownership interest in Norbord from 42% to 35%. As a result of this transaction, the company recorded $18 million of revaluation and disposition gains for the three months ended June 30, 2008.

The company's Board of Directors declared the regular quarterly dividend of C$0.29375 per share on its Senior Preferred shares, Series A payable on September 30, 2008 to shareholders of record on September 20, 2008.

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

Edward C. Kress, Chairman and President, will be available at 416-363-9491 to answer any questions on the company's financial results.

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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Three months ended Six months ended
(unaudited) June 30 June 30
US$ millions, except per share amounts 2008 2007 2008 2007
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Income
Equity loss from Norbord Inc. $ (15) $ (6) $ (28) $ (12)
Equity loss from Fraser Papers Inc. (8) (18) (18) (23)
Foreign exchange gain (loss) (1) (23) 2 (25)
Other income 27 (11) 132 7
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3 (58) 88 (53)
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Expenses
Interest 10 10 20 19
Current income taxes 1 - 2 -
Future income taxes (9) - 8 -
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2 10 30 19
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Net income (loss) $ 1 $ (68) $ 58 $ (72)
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Net income (loss) per common share $ 0.01 $ (1.47) $ 1.25 $ (1.56)
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

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Three months ended Six months ended
(unaudited) June 30 June 30
US$ millions 2008 2007 2008 2007
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Net income (loss) $ 1 $ (67) $ 58 $ (72)
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Other comprehensive income (loss)
Foreign currency translation - 2 3 (9)
Available-for-sale securities (29) (48) (31) (38)
Equity pick-up from subsidiary (1) - (1) -
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(30) (46) (29) (47)
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Comprehensive income (loss) $ (29) $ (113) $ 29 $ (119)
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CONSOLIDATED STATEMENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME

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Three months ended Six months ended
(unaudited) June 30 June 30
US$ millions 2008 2007 2008 2007
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Balance, beginning of period $ (119) $ 32 $ (120) $ -
Transition adjustment - January
1, 2007 - - - 34
Other comprehensive income (loss) (30) (46) (29) (47)
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Balance, end of period $ (149) $ (14) $ (149) $ (13)
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CONSOLIDATED STATEMENTS OF DEFICIT

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Three months ended Six months ended
(unaudited) June 30 June 30
US$ millions 2008 2007 2008 2007
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Deficit, beginning of period $ (289) $ (274) $ (347) $ (267)
Change in accounting policy - - 1 (2)
Net income (loss) for the period 1 (67) 58 (72)
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Deficit, end of period $ (288) $ (341) $ (288) $ (341)
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CONSOLIDATED BALANCE SHEETS

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June 30 December 31
US$ millions 2008 2007
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(unaudited)

Assets
Loans receivable $ 238 $ 230
Securities 286 294
Investment in Norbord Inc. 124 181
Investment in Fraser Papers Inc. 141 129
Investment in Canary Wharf Group, plc 256 256
Investment in Brookfield Properties
Corporation 330 357
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$ 1,375 $ 1,447
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Liabilities
Accounts payable $ 55 $ 162
Future tax liability 8 -
Retractable preferred shares 705 708
Shareholders' equity 607 577
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$ 1,375 $ 1,447
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CONSOLIDATED STATEMENTS OF CASH FLOWS

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Three months ended Six months ended
(unaudited) June 30 June 30
US$ millions 2008 2007 2008 2007
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Cash flow from (used in) operating
activities
Net income (loss) $ 1 $ (67) $ 58 $ (72)
Adjusted for the following items
Excess of dividends received over
equity loss 29 29 58 45
Net change in non-cash working
capital balances 5 41 (74) 31
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35 3 42 4
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Cash flow used in financing
activities
Share redemption - - - (100)
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- - - (100)
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Cash flow from (used in)
investing activities
Investment in Fraser Papers Inc. - (1) (29) (1)
Investment in Norbord Inc. (6) (5) (12) (8)
Loans receivable (29) 3 (1) 105
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(35) (3) (42) 96
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Net change and closing cash balance $ - $ - $ - $ -
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Contact Information

  • Brookfield Investments Corporation
    Edward C. Kress
    Chairman and President
    (416) 363-9491