Brookfield Asset Management Inc. Focused on Property, Renewable Power and Infrastructure Assets. Corporate Profile

Transcription

1 Brookfield Asset Management Inc. A GLOBAL ASSET MANAGEMENT COMPANY Focused on Property, Renewable Power and Infrastructure Assets Corporate Profile November 2009

2 Cautionary Note Concerning Forward-Looking Statements Note: This Corporate Profile contains forward-looking information within the meaning of Canadian provincial securities laws and other forwardlooking statements, within the meaning of certain securities laws including Section 27A of the U.S. Securities Act of 1933, as amended, Section 21E of the U.S. Securities Exchange Act of 1934, as amended, safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 and in any applicable Canadian securities regulations. We may make such statements in this report, in other filings with Canadian regulators or the Securities Exchange Commission (SEC) or in other communications. These forward-looking statements include among others, statements with respect to our financial and operating objectives and strategies to achieve those objectives, capital committed to our funds, the potential growth of our asset management business and the related revenue streams therefrom, statements with respect to the prospects for increasing our cash flow from or continued achievement of targeted returns on our investments, as well as the outlook for the Company s businesses and other statements with respect to our beliefs, outlooks, plans, expectations, and intentions. Although Brookfield Asset Management believes that the anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information 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 and information. Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include: economic and financial conditions in the countries in which we do business; the behavior of financial markets including fluctuations in interest and exchange rates; availability of equity and debt financing; strategic actions including dispositions; the ability to effectively integrate acquisitions into existing operations and the ability to attain expected benefits; the Company s continued ability to attract institutional partners to its Specialty Funds; adverse hydrology conditions; regulatory and political factors within the countries in which the company operates; acts of God, such as earthquakes and hurricanes; the possible impact of international conflicts and other developments including terrorist acts; and other risks and factors detailed from time to time in the company s form 40-F filed with the Securities and Exchange Commission as well as other documents filed by the company with the securities regulators in Canada and the United States including in the Annual Information Form under the heading Business Environment and Risks. We caution that the forgoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Brookfield Asset Management, investors and others should carefully consider the forgoing factors and other uncertainties and potential events. The company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise. 1 Brookfield in Profile A global asset management company, focused on property, power and infrastructure assets PRIMARY OBJECTIVE Generate attractive long-term returns from high quality assets that produce sustainable cash flows KEY STATISTICS Assets Under Management Over $90 billion Long-Term Growth in Cash Flow Per Share Target 12% Market Cap US$14 billion Stock Exchange Listings Investment Grade Credit Rating NYSE, TSX, Euronext DBRS: A(low) S&P: A- Moody s: Baa2 Fitch: BBB 2

3 Brookfield Overview Long-term, value-oriented investor 100 years of experience investing, operating and managing high quality real assets Substantial capitalization $20 billion permanent equity capitalization Sponsor and manage 20 private equity funds and programs since 2001 with capital allocations of ~$19 billion ~$20 billion of public securities managed for clients 3 Focused Global Reach 50 offices or locations 400 investment professionals 14,000 operating employees Operating locations 4

4 Assets Under Management Over $90 billion of assets under management (1) Platform AUM Description Property Commercial office and retail Development and other ±$40 billion ~125 million square feet* of commercial space globally Opportunistic, residential and development Renewable Power (1) ±$12 billion 163 hydroelectric power plants with ~4,000 MW capacity 189 MW wind farm Infrastructure Transmission Timberlands ±$7 billion 8,800 km of transmission in Canada, Chile 2.5 million acres of timberlands in North America and Brazil Specialty Funds ±$5 billion Bridge lending, real estate finance and restructuring Advisory Services and Other ±$30 billion Fixed income, real estate and infrastructure securities and corporate assets (2) (1) Indicative value derived for IFRS purposes (2) Includes investments, cash and other corporate assets * Includes office, retail and development 5 Business Strategy A leading global asset management business Build and maintain best-in-class operating platforms Own and operate high quality assets that generate high levels of sustainable free cash flow Finance assets on a conservative, long-term basis Maintain high level of financial liquidity and operational flexibility to capitalize on growth opportunities Expand funds under management and foster strong client relationships 6

5 Priorities for 2010 Six key operating priorities Position ourselves as a preferred sponsor of acquisition transactions based on our operating abilities, reputation with institutional investors and ability to commit capital Build client relationships with shared investment objectives Protect our business and organically grow our operations by constantly working our assets to enhance their value Generate liquidity from non-strategic assets, and extend the term of debt maturities before they become due Maintain maximum financial and operating flexibility in order to be positioned for growth as markets turn Repurchase interests held by others in our assets at less than net asset value, from those who hold a different view of their long term potential 7 Brookfield Investment Approach Focus on high quality real assets Sustainable cash flows through economic cycles with value appreciation over time Require minimal sustaining capex High barriers to entry Opportunities to capture price escalation Leverage industry and operational expertise of our business units Access to market intelligence Due diligence in assessing quality of opportunities Increased range of investment opportunities Invest on a value basis with institutional partners Patient and disciplined investing to deliver attractive long-term shareholder returns Seek to invest in undervalued assets at opportune times in cycle 8

6 Competitive Advantages as Asset Manager Best-in-class Operating Platforms Unique ability to maximize value and minimize risk through operating expertise Focus on Real Assets Recognized leader in real estate, renewable power, infrastructure and workouts involving underlying real assets Financial Strength $20 billion equity capitalization; $1.5 billion free cash flow Strong Alignment of Interests Significant investments in Brookfield-sponsored Funds Transparency NYSE-listed; Sarbanes-Oxley compliant Well Positioned for Current Market Trends Importance of operational expertise and value of focus on real assets increasingly recognized 9 Opportunities and Recent Initiatives

7 Current Environment Investment Opportunities Financial distress resulting in high quality assets being sold under duress into illiquid markets Potential for once-in-a-lifetime lifetime opportunities Brookfield well positioned to participate Well capitalized with surplus liquidity Strong global relationships and reputation as a reliable sponsor and counterparty Operating platforms assist in due diligence, integration of acquisitions and building value Nevertheless, we exercise caution and patience in ensuring current operations are well protected given continued volatility and uncertainty 11 Current Opportunities Expansion Based on unique ability to create, build and foster new platforms Acquiring Additional Assets in Core Platforms Leveraging Existing Operating Platforms Expanding into Complementary Platforms Expanding Into New Geographic Markets 12

8 Current Opportunities Asset Management Institutions are seeking: Low-risk investment strategies to match liabilities in the face of low risk-free interest rates and high h market volatility High quality counterparties with transparent governance and strong alignment of interest Brookfield offers: High quality assets that: Produce low volatility cash flows that increase over time Provide capital protection in difficult markets and long-term value appreciation Enhance yields relative to government and investment grade fixed income securities Transparency and strong capitalization as a counterparty Broad array of investment opportunities Strong alignment of interests through capital participation 13 Recently Announced Initiatives Restructuring and recapitalization of Babcock & Brown Infrastructure (BBI) and acquisition of key infrastructure assets BBI Profile: US$8 billion infrastructure company listed on the ASX Owner of premier transportation t ti and utility assets in Australia, UK, Europe and U.S. The Transaction: Brookfield-sponsored entities will invest ~ US$1.1 billion as part of $1.8 billion recapitalization Cornerstone investment will yield up to 40% interest in BBI Direct acquisition of a 49.9% interest in Dalrymple Bay Coal Terminal in Australia and 100% of PD Ports in the UK Proceeds will de-lever BBI to an appropriate level and address near term maturities Brookfield Opportunity: Investment in high quality core infrastructure assets expected to earn attractive long-term returns Significant step forward for Brookfield s infrastructure platform and enhanced position as a leading infrastructure asset manager 14

9 Recently Announced Initiatives cont d $5B Real Estate Turnaround Consortium International pension funds and sovereign wealth funds Allocations of $300 million to $1 billion Global focus with emphasis on North America, Europe and Australasia C$1B Debtor-In-Possession Fund Economic Development Canada, CIBC and Sun Life Focus on Canadian companies and U.S. subsidiaries $400M Colombia Infrastructure Fund Colombian institutional investors Focus on Colombian infrastructure re Largest private equity and infrastructure fund in the country $500M Peru Infrastructure Fund Brookfield and Apoyo appointed by Peruvian Government to lead Fund Largest private equity and infrastructure fund in the country with Brookfield contributing up to 20% 15 Current Operating Platforms

10 Property Operations One of the largest property investors worldwide Approximately $40 billion (1) of property assets with 125 million (2) sq.ft. Commercial Properties Development and Other Operations Office Retail Development Services Residential $25.4 billion $1.8 billion $5.9 billion $1.3 billion $5.3 billion Approx. 95 million sq. ft. (1) Indicative value derived for IFRS purposes Over 20 retail shopping malls in Australia, Brazil and UK Commercial, residential & rural development properties (2) Includes office, retail and development Property and brokerage services 130,000 building lots, 61 m sq. ft. condo density 17 Renewable Power Generation One of the largest private owners of hydro generation assets $12 billion* portfolio should benefit from forecasted higher energy prices and carbon-neutral profile Diversified Generation Base Marketing Optionality Flexible Production Revenue Stability 163 hydro power plants on 63 river systems, and 1 wind farm Key market interconnections Peaking capabilities with storage of over 3,400 GWh Approx. 80% of generation under contract for the next two years * Indicative value derived for IFRS purposes 18

11 Timber 40-year track record of owning, operating and financing timberlands in North and South America that generate strong, sustainable cash flows $3.6 billion of timberlands under management Scarce, High Quality Resource 2.5 million acres of timberlands with premium species mix Geographic Diversification Coastal locations and proximity to low-cost customers provides market flexibility Additional Upside Opportunity for higher better use (HBU) lands 19 Transmission 80-year track record owning and operating electricity transmission assets $2.8 billion regulated rate-base business which produces stable revenues with inflationary growth High Quality Diversity Across Growth Assets Regulatory Potential Regimes Over 8,800 kilometers of transmission lines Canada and Chile Significant opportunities to expand system at attractive returns 20

12 Specialty Funds Manage approximately $5 billion of assets for institutional and retail investors in the areas of bridge and real estate financing and restructuring Restructuring Bridge Lending Real Estate Finance $1.9 Billion $0.6 Billion $2.5 Billion 21 Advisory Services & Investment Management Business Manage $23 billion of assets in fixed income and real estate securities Fixed Income Real Estate Securities (Equity Capital) $18 Billion $5 Billion 22

13 Asset Management Compelling Private Institutional Fund Platform Diversity of product mix with substantial institutional investor backing 20 differentiated private equity funds and investment programs ~$19 billion of institutional capital commitments Over 60 institutional fund clients Global thought leaders Diversity of investor base by type and geography Compelling investment strategies Wide range of product offerings along the risk-return spectrum Focus on core competencies of the broader platform Attractive platform for investors Well capitalized Leading owner-operator Strong governance and transparency Clear alignment of interests through meaningful fund commitments 24

14 Diversity of Global Institutional Investors in Private Funds Type of Client by Commitment Client Base by Geography (1) Corporation 2% Consultants 4% Bank/Investment /Financial 7% Other 4% Hospitals Healthcare 1% Family Office 1% Public Pension 50% Australasia 5% Europe 10% South America 5% Canada 39% Sovereign USA 21% 41% (1) Based on dollars committed (2) Based on number of Brookfield clients 25 Assets Under Management Private Funds Strong track record of creating value through Core, Value Add and Opportunistic strategies Year As at December 31, 2008 Formed Core and Value Add U.S. Core Office 2006 Canadian Core Office 2005 Multiplex Funds West Coast Timberlands 2005 East Coast Timber Fund 2006 Global Timber Fund 2008 Transmission 2006 Bridge LoanI 2003 Bridge Loan II 2007 Real Estate Finance various Brookfield Real Estate Services Fund 2003 Year As at December 31, 2008 Formed Opportunity and Private Equity Real Estate Opportunity 2006 Real Estate Opportunity II 2007 Brazil Retail Property 2006 Brazil Timber 2008 Residential Properties U.S Tricap Restructuring I 2002 Tricap Restructuring II 2006/7 BrookfieldReal Estate Investment Consortium 2009 Colombia Infrastructure Fund 2009 Debtor In Possession Fund

15 Investment Highlights Q & A Investment Highlights Downside Protection Market capitalization supported by high quality assets Growth Potential Through expansion of operating businesses and asset management activities Proven Track Record of Value Creation 26% five-year cash return on book equity per share Substantial Liquidity >$2.5 billion liquidity plus co-investor commitments for new opportunities Management Alignment Officers and directors own 17% of Class A shares 28

16 Cash Flow From Operations Our principal financial objective is to increase cash flow per share by 12% annually over the longer term Major Disposition Gains (per share): $3.11 $ $ $ $0.35 $2.33 $1.46 $0.61 $0.70 $0.95 $ Expanding Third-Party Fee Income The increasing contribution from fees enhances our return on capital Total Revenue ($ millions) $415 $449 $246 $257 $168 $

17 Increasing Dividend We direct a portion of our cash flows to dividends $0.47 $ % 9% $0.51* $ % $0.22 9% $0.24 8% 50% $ * Excludes Brookfield Infrastructures special dividend of $ Share Buybacks Share Repurchases* (millions) Average Price/Share Total Purchases (US$ millions) 2009 YTD 1.50 $12.09 $ $ $ $ $ $ $ $ $ $ $ $ 6.59 $ 102 * Share information reflects stock splits 32

18 Strong Financial Position Significant liquidity Substantial financial liquidity, with additional capital from partners to fund growth Free cash flow ±$1.5 billion annually Strong and flexible capitalization $20 billion of permanent equity capitalization Low debt to capitalization 15% at corporate level and 44% on proportionately consolidated basis with affiliates* Long-term financing and permanent equity matched to longterm assets Strong investment grade ratings * Based on underlying values derived for IFRS purposes as at December 31, Solid Credit Ratings Flexibility inherent in asset base and continued access to capital enables us to further enhance liquidity position Investment-grade financing strategy Finance primarily at asset level and on non-recourse basis Maintain substantial liquidity Extend maturity profile by refinancing assets with long-dated debt Maturities diversified over long period Credit Ratings DBRS S&P Moody's Fitch Commercial paper R-1 (low) A-1 (low) Term debt A (low) A- Baa2 BBB Preferred shares Pfd-2 (low) P-2 34

19 Platform for Growth Brookfield is well positioned Permanent equity capitalization Durable, long-term cash flows Strong liquidity Leading operating platforms Significant annual cash flow and capital turnover Institutional relationships Low parent company debt Increasing opportunities to invest 35 Additional Information

20 Stock Information Exchange Listings: Shares Outstanding: Trading Volume (NYSE/TSX): Quarterly Dividend: NYSE/TSX/Euronext BAM million (diluted) 2.7 million average daily during Q US$0.13 per share Top Holders ( > 5 million shares): RBC Asset Management Morgan Stanley (1) Third Avenue Management TD Financial a Group (2) Bank of Nova Scotia Invesco Trimark Ltd. Horizon Asset Management Barclays Global Investors Wellington Management Co. Davis Selected Advisers Source: ThomsonOne McLean Budden Select Equity Group First Manhattan William Blair & Company, LLC Pyramis Global Advisors (Fidelity) British Columbia Investment Management Corp. Harris Investment Management, Inc. (1) Includes wholly owned subsidiary Van Kempen Asset Management (2) Includes TD Securities and TD Asset Management 37 Common Share Performance We measure performance over the long term. BAM s 20-year track record of share price performance exceeds the S&P and TSX indices Common Share Price Compound Growth* 20-Year 10-Year 5-Year 1-Year BAM 12.5% 22.0% 13.7% (12.9)% S&P % (0.2)% 1.0% (6.9)% S&P TSX 7.9% 7.3% 8.3% 0.5% * As of September 30, 2009, inclusive of dividends 38

21 Investment Principles BUSINESS PHILOSOPHY Build the business and all the relationships based on integrity Attract and retain high calibre individuals who will grow with us over the long term Ensure our people think and act like owners in all their decisions Treat our clients money like it is our own INVESTMENT GUIDELINES Invest where we possess competitive advantages Acquire assets on a value basis with a goal of maximizing return on capital Build sustainable cash flows to provide certainty, reduce risk and lower the cost of capital Recognize that superior returns often require contrarian thinking MEASUREMENT OF OUR CORPORATE SUCCESS Measure success based on total return on capital over the long term Encourage calculated risks, but compare returns with risk Sacrifice short-term profit, if necessary, to achieve long-term capital appreciation Seek profitability rather than growth, because size does not necessarily add value 39 Sustainability Recognition Meritas Jantzi Social Index ( Mutual Fund focused on socially responsible investing. Brookfield is among the top 25 of 66 firms in the index. KLD Global Climate 100 Index (GC100) ( KLD Research is an independent research firm based in Boston Massachusetts. GC100 consists of 100 companies whose activities demonstrate the greatest potential for mitigating immediate and long-term causes of climate change. Desjardins Environment Fund ( Desjardins is a Canadian financial institution with a dedicated Environment Fund investing in corporations that contribute to maintaining and improving the environment. Brookfield meets the environmental standards for eligibility in this fund. 40

22 Investor Relations Contacts Contact Title Address Phone Number Bruce Flatt Chief Executive Officer (416) (212) Brian Lawson Chief Financial Officer (416) Sachin Shah Katherine Vyse Senior Vice President, Finance Senior Vice President, Investor Relations and Communications (416) (416)