TSX Commentary » Brookfield Asset Management

Brookfield Asset Management BAM.A A Strong Finish To 2009 With Q4 Results Above Expectations

admin — Mon, 22 Feb 2010 22:53:09 +0000

Brookfield Asset Management (BAM.A) – $23.25 – A Strong Finish To 2009 With Q4 Results Above Expectations
Outperform, Average Risk, Price Target: $27.00 (prev. $24.00)
Brookfield Asset Management “BAM” reported Q4/09 and 2009 results. Q4/09 CFPS of $0.63 was ahead of expectations, and +55% from Q4/08’s $0.41. Investment/Other Income significantly exceeded forecast. RBC CM suspects this line item benefited from both FX gains and positive marks (GGP distressed debt and/or common shares?). RBC CM believes that 2009 was a year in which management sowed the seeds for many years of future “core” CFPS growth. The Company has ~$4B of “core” liquidity. BAM avoided the dilutive effect of issuing common shares in 2008/2009 and it actually continued to invest capital into existing and new business. As a result, RBC CM believes BAM now owns or manages more assets per share (and has greater capital commitments per share) than it did one, two or three years ago. These factors provide important leverage for CFPS growth over time. With the inclusion of Q4/09 results, and reinforced conviction that BAM should now be working its way through the “earnings valley”, RBC CM has raised its 2010/2011 CFPS estimates by +$0.34/+$0.21 to $1.83/$1.99. RBC CM’s $27 price target is derived via the application of a 15x multiple to its 2011E Adjusted CFPS and it equates to a discount of ~10%-15% to RBC CM’s view of potential pre-tax underlying value per share, one-year hence.

Brookfield Asset Management Cash Flow Lower But Finances Strong

admin — Mon, 10 Aug 2009 04:08:12 +0000

Q2/09 F.D. EPS were $0.24 vs. $0.17 last year, lifted by deferred tax
credits. Cash flow per share was $0.46 vs. $0.62 as higher income from
commercial properties was more than offset by lower income from electric
power, infrastructure, timberland and specialty funds.

Acquisitions of high-quality distress assets in the U.S. and U.K. are a focus of keen interest.

BAM has liquidity of $2.0 bln at the parent company ($3.1 bln including its
subsidiaries) and debt/capitalization of only 28% (unconsolidated at book
value) giving it the financial flexibility to both weather the credit crunch and
to acquire property and infrastructure assets on attractive terms.

Brookfield Asset Management Financial Flexibility Grows

admin — Wed, 15 Jul 2009 03:48:10 +0000

BAM is selling its remaining Canadian renewable power assets to 50%-
owned Great Lakes Hydro Income Fund for C$945 mln, further increasing its
liquidity and providing funds for acquisitions to take advantage of very
attractive commercial property investment markets.

Proforma the sale, which will provide C$365 mln in cash, BAM will have total
liquidity of $2.7 bln at the parent company ($3.9 bln. incl. subsidiaries),
giving it the financial flexibility to both weather the credit crunch and
purchase commercial property assets on attractive terms.

BAM, with its pension fund and other investment partners, intends to
capitalize on what it perceives to be historic opportunities to invest in highquality
shopping centre and office properties, particularly in the U.S. and
the U.K. Significant transactions appear likely to occur in 2009-2010.