EX-99.6 7 y49937ex99-6.txt PRESS RELESE DATED FEBRUARY 12, 2001 1 BRASCAN NEWS RELEASE STOCK SYMBOL: BNN TSE/NYSE A conference call has been arranged for investors and analysts to discuss Brascan's year end results with senior management on MONDAY FEBRUARY 12 AT 10:00 A.M. The call can be accessed by dialing 416-641-6699 (local and overseas) or 1-800-381-7839 (toll free in North America) at approximately 9:50 a.m. A taped rebroadcast of the teleconference will be available until February 26, 2001 by calling 416-626-4100 and entering reservation number 17786511. This conference call will also be Webcast live on our web site at www.brascancorp.com, where it will be archived for future reference. A supplementary information package is also available on our web site under "Press Releases". BRASCAN ANNOUNCES RECORD EARNINGS OF $648 MILLION TORONTO, FEBRUARY 12, 2001 - Brascan Corporation today announced record earnings for the year ended December 31, 2000 of $648 million or $3.41 per share. These results, both before and after investment gains, are the highest in the company's history. 2000 HIGHLIGHTS - Earnings from continuing operations increased 36% to $388 million or $1.96 per share. - Progress continued to be made across the group on productivity programs, increasing operating income by 19% to $481 million. - Over $2.1 billion was invested during 2000 in new mining, forest products, commercial property and energy assets to expand the group's production base. - Over $800 million of group equity securities were repurchased at discounts to their underlying values. - In total, the underlying values of Brascan's common shares was enhanced by approximately $750 million through the group's value adding initiatives. BRASCAN'S CHAIRMAN, ROBERT HARDING, COMMENTED THAT: "SUCCESS WITH OUR PROFIT MARGIN IMPROVEMENT PROGRAM AND ATTENTION TO ADDING VALUE TO EACH OF OUR CORE OPERATIONS PRODUCED SIGNIFICANT RESULTS FOR THE YEAR AND POSITIONED US FOR FURTHER IMPROVEMENT BEYOND 2000." 2 2 FINANCIAL HIGHLIGHTS
Three months ended Year ended December 31 December 31 Cdn.$ millions, except per share amounts 2000 1999 2000 1999 GROUP REVENUES $3,613 $3,494 $13,524 $12,729 --------------------------------------- INCOME FROM CONTINUING OPERATIONS $ 91 $ 81 $ 388 $ 286 Income from discontinued operations -- 12 10 27 Gain on sale of discontinued operations -- 110 250 110 --------------------------------------- NET INCOME $ 91 $ 203 $ 648 $ 423 --------------------------------------- PER FULLY DILUTED CLASS A AND CLASS B COMMON SHARE: Income from continuing operations Net income $ 0.45 $ 0.40 $ 1.96 $ 1.38 $ 0.45 $ 1.08 $ 3.41 $ 2.15 ---------------------------------------
Shareholders' equity increased to $4.9 billion at the end of December 2000, 38% higher than five years ago after distributing $1.1 billion as shareholder dividends and for share repurchases. OPERATING RESULTS Operating income for 2000, before investment and other income, increased to $481 million from $404 million in 1999, with all of the company's businesses reporting improved results. BRASCAN'S PROPERTY OPERATIONS contributed $111 million, up from $100 million 1999. Strong industry fundamentals in most of Brookfield's commercial property and housing markets increased its operating cash flows for 2000 by 23% to $474 million, of which Brascan's share was $228 million. Brookfield increased the returns from its commercial property portfolio through proactive re-leasing and lease restructurings of more than five million square feet of space during 2000. NATURAL RESOURCES OPERATIONS contributed $148 million to operating income, up 40% from $106 million last year due mainly to productivity improvements, higher prices for nickel and aluminum and a turnaround in pulp and paper markets. The first group of projects completed under Noranda's Six Sigma productivity improvement program improved Noranda's pre-tax 2000 earnings by $34 million, and a second phase of 149 new projects is now under way. ENERGY POWER OPERATIONS contributed $68 million, up from $66 million last year. Growth in power revenues in Ontario and Quebec was offset by the impact of unusually dry conditions in the US Midwest on power operations in Louisiana. FINANCIAL AND OTHER OPERATIONS contributed $154 million, up from $132 million last year, reflecting increased business activity in Trilon's financial advisory and brokerage services and higher investment yields, as well as an improvement in Brascan's Brazilian operations. 3 3 BUSINESS DEVELOPMENT INITIATIVES Each of the group's businesses is actively engaged in enhancing its core operations through developing and acquiring new high quality production facilities and businesses, many of which utilize new and emerging technologies. The proprietary magnesium technology developed by Noranda has been installed at its new Magnola plant in Quebec, which recently started to produce metal on a continuous basis. Nexfor completed a $68 million acquisition of New Brunswick-based Juniper Lumber Company, which provides an entry into the high-growth I-joist engineered lumber business. Great Lakes is applying new technologies to upgrade and expand the generating capacity of its hydroelectric stations in northern Ontario. Through its Maclaren Energy affiliate, Great Lakes also entered the energy marketing business in the northeastern United States using advanced control systems. Brookfield and Trilon announced the formation of a real estate technology partnership with two financial partners to provide venture capital for emerging technology-based product and service initiatives for real estate companies and their tenants. Trilon launched the $100 million Trilon Opportunity Fund, a private equity fund to invest in start-up companies with new and emerging technologies that have established partnerships with strong industry leaders. Trilon also expanded its asset management activities through a US$200 million investment in The Imagine Group, a finite-risk reinsurance company based in Bermuda. CAPITAL INVESTMENT PROGRAM Progress continued on the multi-year capital investment program to expand the group's production base and long-term earning potential. BROOKFIELD added four major office towers in western Canada to its property portfolio, including the 2.6 million square foot Bankers Hall complex in Calgary, and is proceeding with the development of a 1.2 million square foot office building in midtown Manhattan for the headquarters of a major financial institution. In January 2001, Brookfield announced an agreement to acquire a 50% interest in the 1.8 million square foot Bay-Adelaide mixed-use development project in downtown Toronto. NORANDA is well advanced on its capital investment program to expand its mining and metallurgical production base. Projects substantially completed this year include the Bell Allard copper zinc mine in Northern Quebec, the CCR copper refinery expansion in Montreal and the New Madrid aluminum smelter expansion in Missouri. Progress is well under way on four other major projects - the Magnola magnesium plant in Quebec, the Huntingdon high-speed aluminium foil mill in Tennessee, the Antamina copper-zinc mine in northern Peru and the Altonorte copper smelter expansion in Chile. Construction of the Kidd Creek Deep Mine in northern Ontario has been approved and feasibility studies are being carried out for the recently discovered high-grade zinc deposit in the Matagami region of Quebec and the Koniambo nickel deposit in New Caledonia. 4 4 NEXFOR'S program to expand its panelboard operations continued with the completion of the Joanna oriented strandboard mill in South Carolina and the expansion of its OSB mill in Inverness, Scotland. Construction is well under way on a second new OSB mill in Alabama, Nexfor's sixth in North America, and the expansion of its panelboard mill in Cowie, Scotland will commence shortly. GREAT LAKES announced a $500 million capital investment program, an integral part of a strategic plan to double earnings from the group's power generating business over the next five years by developing and acquiring hydroelectric facilities with water storage capacity and expanding its power transmission interconnections. Projects under way and in the active feasibility stage include the High Falls generating station redevelopment in northern Ontario, the acquisition of two hydroelectric stations in British Columbia and the development of five hydroelectric stations in southern Brazil. Further details on the major projects now under development in the group's capital investment program are included on page 8 of this release. SURFACING SHAREHOLDER VALUE With the progress made recently in expanding the group's production base and increasing returns from existing operations, attention is being focussed on translating the rising underlying values created in each area of the company's businesses into higher share prices for the benefit of investors. Towards this end, group companies repurchased $827 million of their shares at discounts to their underlying values, adding approximately $150 million to the value of Brascan's common shares. Major repurchases included: - Brascan repurchased convertible notes and 4.8 million Class A common shares for $132 million during 2000. - Brookfield acquired all of the minority shareholdings of Carma Corporation and increased its ownership of Gentra to 85% during 2000. - Trilon acquired 14.5 million of its shares in January 2001, increasing Brascan's ownership of Trilon to 71%. - Brascan made an offer to acquire 100% of Great Lakes, which is expected to be approved by Great Lakes' shareholders on February 28, 2001. New efforts are also being made to expand the company's investor base by communicating its recent progress to current and prospective investors. As part of this initiative, the company listed its Class A common shares on the New York Stock Exchange on December 20, 2000, expanding its ability to reach out to investors across North America. 5 5 CORPORATE AND OUTLOOK The regular quarterly dividend of $0.25 per share was declared, payable on May 31, 2001 to Class A and B common shareholders of record at the close of business on May 1, 2001. ROBERT HARDING, BRASCAN'S CHAIRMAN, IN COMMENTING ON THE OUTLOOK FOR THE CURRENT YEAR, STATED THAT: "WE HAVE ESTABLISHED LEADING POSITIONS IN THREE VALUE SECTORS - COMMERCIAL PROPERTIES, NATURAL RESOURCES AND HYDROELECTRICITY - AS WELL AS A STRONG AND GROWING FINANCIAL SERVICES BUSINESS. WE WILL CONTINUE TO ENHANCE VALUE THROUGH FOSTERING A PERFORMANCE CULTURE, BY EXPANDING OUR BUSINESS BASE AND BY EMPLOYING A VALUE-ADDING APPROACH TO EACH OF OUR ACTIONS. WE ARE DETERMINED TO TRANSLATE THE SIGNIFICANT VALUES CREATED IN RECENT YEARS INTO INCREASED SHAREHOLDER RETURNS." * * * * * * * * * * Note: This news release contains forward-looking statements concerning the company's business and operations. 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 company's most recent Annual Information Form for a description of the major risk factors. * * * * * * * * * * BRASCAN CORPORATION and its affiliates provide a diversified range of products and services to their customers and clients. The group employs over 50,000 people in managing and operating more than 120 major production facilities and properties. Brascan is focussed on increasing shareholder value through its ownership interests in businesses with leadership positions in the natural resources, commercial properties, energy and financial services industries operating throughout North and South America. The company is listed on The Toronto Stock Exchange and the New York Stock Exchange under the symbol BNN. For more information, please contact one of the following individuals or visit our web site.
MEDIA: INVESTORS AND FINANCIAL ANALYSTS: Robert J. Harding Richard Legault Katherine C. Vyse Chairman Senior Vice-President and Vice-President, 416-363-9491 Chief Financial Officer Investor Relations 416-956-5183 416-369-8246
WEB SITE: www.brascancorp.com 6 6 BRASCAN CONSOLIDATED FINANCIAL STATEMENTS(1) CONSOLIDATED STATEMENT OF INCOME
Year ended December 31 Cdn.$ millions, except per share amounts 2000 1999 ------------------------------------------------------------------ GROUP REVENUES $13,524 $12,729 REVENUE OF EQUITY ACCOUNTED AFFILIATES 12,330 11,652 ------------------- CONSOLIDATED REVENUES 1,194 1,077 Equity in pre-tax earnings of affiliates 376 290 ------------------- INCOME BEFORE THE UNDERNOTED ITEMS 1,570 1,367 Operating expenses 608 561 Interest expense 276 262 Minority interests 147 130 Taxes and other provisions 151 128 ------------------- INCOME FROM CONTINUING OPERATIONS 388 286 Income from discontinued operations 10 27 Gain on sale of discontinued operations 250 110 ------------------------------------------------------------------ NET INCOME $ 648 $ 423 ================================================================== PER CLASS A AND CLASS B COMMON SHARE Income from continuing operations $ 1.96 $ 1.38 Net income $ 3.41 $ 2.15 ==================================================================
CONSOLIDATED BALANCE SHEET
DEC. 31 Dec. 31 Cdn.$ millions 2000 1999 --------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 347 $ 100 Securities 2,371 2,509 Loans and other receivables 2,833 2,691 Corporate investments 3,654 3,614 Property and equipment 2,018 1,832 Other assets 378 314 --------------------------------------------------------------------------------- $11,601 $11,060 ================================================================================= LIABILITIES Accounts payable and other $ 812 $ 639 Corporate borrowings 1,360 1,718 Subsidiary company borrowings 2,420 2,161 ----------------------- 4,592 4,518 DEFERRED CREDITS 395 332 CAPITAL BASE Minority interests 1,701 1,596 Shareholders' equity(2, 3) 4,913 4,614 ----------------------- 6,614 6,210 --------------------------------------------------------------------------------- $11,601 $11,060 =================================================================================
7 7 CONSOLIDATED STATEMENT OF CASH FLOW
Year ended December 31 Cdn.$ millions 2000 1999 --------------------------------------------------------------------------------- GROUP OPERATING CASH FLOWS $ 1,708 $ 1,546 Operating cash flows of equity accounted affiliates 1,265 1,147 ------------------------ CONSOLIDATED CASH FLOW FROM OPERATIONS 443 399 ------------------------ FINANCING AND SHAREHOLDER DISTRIBUTIONS Corporate borrowings, net (382) 85 Subsidiary company borrowings, net 198 30 Minority interests 48 (109) Convertible notes repurchased (40) -- Shares issued -- 1 Shares repurchased (92) -- Convertible note interest paid (6) (9) Common and preferred share dividends (213) (208) ------------------------ (487) (210) ------------------------ INVESTING Securities 139 (46) Loans and other receivables, net (230) 21 Investment in property and equipment (201) (115) Corporate investments sold 594 -- Other (11) (99) ------------------------ 291 (239) --------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS Increase (Decrease) 247 (50) Balance, beginning of year 100 150 --------------------------------------------------------------------------------- Balance, end of year $347 $100 =================================================================================
NOTES: 1. These financial statements should be read in conjunction with the Notes to the Company's audited Consolidated Financial Statements for the year ended December 31, 2000 and 1999. 2. SHAREHOLDERS' EQUITY
DEC. 31 Dec. 31 Cdn.$ millions 2000 1999 -------------------------------------------------------------------------------- Convertible Notes $ 99 $ 152 Class A Preference Shares 732 732 Common Shares Class A and Class B 4,082 3,730 -------------------------------------------------------------------------------- $ 4,913 4,614 ================================================================================
3. SHARES OUTSTANDING
DEC. 31 Dec. 31 2000 1999 -------------------------------------------------------------------------------- Class A Shares issued 169,290,683 173,756,186 Class B Shares issued 85,120 85,120 -------------------------------------------------------------------------------- 169,375,803 173,841,306 Reserved for conversion of subordinated notes 3,116,782 4,839,073 -------------------------------------------------------------------------------- Total fully diluted shares 172,492,585 178,680,379 ================================================================================ Unexercised Options 3,012,707 2,959,407 -------------------------------------------------------------------------------- Exercisable Options 1,965,037 2,272,787 --------------------------------------------------------------------------------
8 8 BRASCAN SEGMENTED FINANCIAL STATEMENTS(1) SEGMENTED STATEMENT OF INCOME
Three months ended Year ended December 31 December 31 Cdn.$ millions, except per share amounts 2000 1999 2000 1999 -------------------------------------------------------------------------------------- GROUP REVENUES $ 3,613 $ 3,494 $13,524 $12,729 -------------------------------------------- OPERATING INCOME Property operations 30 36 111 100 Natural resource operations 25 44 148 106 Energy operations 12 10 68 66 Financial and other operations 42 33 154 132 Investment and other income 26 21 113 91 -------------------------------------------- 135 144 594 495 -------------------------------------------- UNALLOCATED EXPENSES Interest expense 26 27 106 111 Minority interests 17 17 67 68 Operating and other costs 2 2 8 8 Taxes and other provisions (1) 17 25 22 -------------------------------------------- 44 63 206 209 -------------------------------------------- INCOME FROM CONTINUING OPERATIONS 91 81 388 286 Income from discontinued operations -- 12 10 27 Gain on sale of discontinued operations -- 110 250 110 -------------------------------------------------------------------------------------- NET INCOME $ 91 $ 203 $ 648 $ 423 ====================================================================================== PER CLASS A & CLASS B COMMON SHARE Income from continuing operations $ 0.45 $ 0.40 $ 1.96 $ 1.38 Net income $ 0.45 $ 1.08 $ 3.41 $ 2.15 ======================================================================================
SEGMENTED BALANCE SHEET
DEC. 31 Dec. 31 Cdn.$ millions 2000 1999 ------------------------------------------------------------------------------------ PROPERTY OPERATIONS Brookfield Properties Corporation $1,332 $1,226 NATURAL RESOURCE OPERATIONS Noranda Inc. 1,809 1,787 Nexfor Inc. 400 377 ENERGY OPERATIONS Great Lakes Power Inc. 692 664 FINANCIAL AND OTHER OPERATIONS Trilon Financial Corporation 1,376 1,303 Brascan Brazil Ltd. 399 330 FINANCIAL AND OTHER ASSETS 1,137 1,481 ------------------------------------------------------------------------------------ $7,145 $7,168 ------------------------------------------------------------------------------------ LIABILITIES Accounts payable and other $ 42 $ 51 Corporate borrowings 1,360 1,718 ------------------------------ 1,402 1,769 DEFERRED CREDITS 224 179 CAPITAL BASE Minority interests 606 606 Shareholders' equity 4,913 4,614 ------------------------------ 5,519 5,220 ------------------------------------------------------------------------------------ $7,145 $7,168 ====================================================================================
NET ASSET VALUE
Market Net Asset Number of Values Values Common Shares February 9 February 9 millions, except per share amounts and Equivalents 2001 2001 -------------------------------------------------------------------------------------- PROPERTY OPERATIONS Brookfield Properties Corporation 78.1 $26.05 $2,034 NATURAL RESOURCE OPERATIONS Noranda Inc. 94.1 16.90 1,590 Nexfor Inc. 47.4 6.95 329 ENERGY OPERATIONS Great Lakes Power Inc. 116.8 21.00 1,709 FINANCIAL AND OTHER OPERATIONS Trilon Financial Corporation 106.1 13.05 1,385 Brascan Brazil Ltd. 56.0 11.43 640 FINANCIAL AND OTHER ASSETS 1,137 -------------------------------------------------------------------------------------- $8,824 ====================================================================================== LOANS AND ACCOUNTS PAYABLE $1,402 DEFERRED CREDITS 100 CAPITAL BASE Minority interests 606 Preference shares 732 Common shares and convertible notes 5,984 -------------------------------------------------------------------------------------- $8,824 -------------------------------------------------------------------------------------- PER CLASS A AND CLASS B COMMON SHARE $34.69 ======================================================================================
NOTE: 1. SEGMENTED FINANCIAL STATEMENTS These financial statements reflect the company's publicly traded operating affiliates and Brascan Brazil on an equity basis. 9 8 BRASCAN CAPITAL INVESTMENT PROGRAM SUMMARY OF MAJOR PROJECTS COMMERCIAL PROPERTIES 300 Madison Avenue, Planning is now under way for a 1.2 million square foot office building development at 42nd Street and New York Madison Avenue in New York City. The building, to be fully leased prior to construction, is being designed for the international headquarters of a major financial institution. Bankers Hall, Calgary Construction of the second tower at the 2.6 million square foot Bankers Hall office complex in Calgary, acquired in May 2000, has been completed and 60% of the remaining vacant space has been leased. Bay-Adelaide Centre, Brookfield has announced an agreement to acquire a 50% interest in this 1.8 million square foot Toronto mixed-use project in downtown Toronto. The first phase, a 1.0 million square foot office tower, will begin construction this year subject to the necessary pre-leasing. MINES Antamina, Peru Construction of the US$2.3 billion Antamina copper-zinc project in northern Peru is proceeding on budget and ahead of schedule. This mine will be one of the world's largest producers of copper and zinc ores when it starts commercial production in 2002. Kidd Creek, Ontario Development of the Kidd Creek Deep Mine in northern Ontario has been approved, to allow access to over 12 million additional tonnes of copper, zinc and silver ore. When completed in 2004, this will be the world's deepest base metal mine. Matagami, Quebec A feasibility study has commenced on developing a new zinc mine at Noranda's Matagami mining camp in northern Quebec, where three zinc-rich massive sulphide deposits have been discovered containing over 5 million tonnes of high grade, near surface reserves. METALLURGICAL FACILITIES Magnola, Quebec Construction of a 63,000 tonne magnesium metal plant in Danville, Quebec is now complete and the first magnesium ingots have been poured. When in full production in 2001, this plant will be the largest and one of the lowest cost producers of this strong, light-weight metal. Huntingdon, Tennessee Construction of the US$240 million high-speed aluminium foil plant in Tennessee is proceeding on schedule, for a production start in early 2001. This project will have an annual capacity of 90,000 tonnes and increase Noranda's foil production capacity by 75%. Altonorte, Chile Construction has begun on a US$170 million expansion of the Altonorte copper smelter near Antofagasta, Chile, which will increase the smelter's annual copper production to 290,000 tonnes and sulphuric acid production to 700,000 tonnes. PANELBOARD MILLS Huguley, Alabama Construction has started on the new US$120 million Barton OSB mill in Alabama, its sixth in North America, for completion in 2001. This will make Nexfor one of the world's largest producers of this building product, with an aggregate annual production capacity of 2.7 billion square feet. Cowie, Scotland A $40 million rebuild of one particleboard line will commence this year to install a continuous press and new recycled wood processing facility. This project will reposition the Cowie panelboard mill as a leading low-cost producer of flooring products for the UK market. HYDROELECTRIC STATIONS High Falls, Ontario Construction will commence this spring on the $75 million High Falls generating facilities in northern Ontario, which will increase its peak power generating capability and its installed capacity to 45 megawatts by 2002. Powell River Energy, The Great Lakes Hydro Income Fund has acquired a 50% interest in two hydroelectric generating stations British Columbia with capacity of 82 megawatts in southwestern British Columbia for $56 million. Passo do Meio, Site development has begun on the 50%-owned 30 megawatt Passo do Meio hydroelectric generating station Southern Brazil in the State of Rio Grande do Sul.