Brookfield Properties Reports First Quarter 2007 Results




    All dollar references are in U.S. dollars unless noted otherwise.

    NEW YORK, April 27 /CNW/ - Brookfield Properties Corporation (BPO: NYSE,
TSX) today announced net income of $53 million or $0.20 per share and funds
from operations ("FFO") of $129 million or $0.48 per share for the quarter
ended March 31, 2007.

    During the first quarter, Brookfield Properties leased 1.6 million square
feet of space at an average of $22 per square foot, which represented a 29%
improvement in rent spread on a per square foot basis over the 1.8 million
square feet of leases which expired at an average of $17 per square foot. The
company's portfolio-wide occupancy finished the quarter at 95.0%.

    FINANCIAL RESULTS

    Net income for the three months ended March 31, 2007 totaled $53 million,
or $0.20 per share, compared to $49 million or $0.21 per share during the same
period in 2006. For the three months ended March 31, 2007, funds from
operations totaled $129 million or $0.48 per share, up from $103 million or
$0.44 per share during the same period in 2006.

    Commercial property net operating income for the first quarter of 2007
was $317 million, up from $170 million for the first quarter of 2006. The
increase is primarily due to the contribution from the U.S. Office Fund which
was fully invested in the fourth quarter of 2006.

    Residential development operations contributed $42 million of net
operating income in the first quarter of 2007, up from $25 million in the
first quarter of 2006.

    STOCK SPLIT

    Shareholders approved a three-for-two division of the company's common
shares and a nine-for-four division of the company's Class A Redeemable Voting
preferred shares at the annual general meeting on April 26, 2007. Shareholders
of record at the close of business on May 8, 2007 will be entitled to receive
the common shares and Class A Redeemable Voting Preferred shares, as the case
may be, resulting from the subdivision, payable on or about May 22, 2007.
Fractional shares will be paid in cash at the prevailing market price.

    Brookfield Properties is undertaking the stock split to ensure its shares
remain accessible to individual shareholders, and to further enhance the
liquidity of the company's common shares while maintaining the proportionate
voting rights of the Class A Redeemable Voting Preferred Shares. The division
will have no unfavorable tax consequences in the United States or in Canada,
and will not dilute shareholders' equity.

    Registered shareholders will be mailed share certificates representing
the stock split and the brokerage accounts of non-registered shareholders will
be credited for the additional shares representing the stock split on or about
the payment date.

    The common shares of the company are expected to begin trading on a
post-stock split basis on the Toronto Stock Exchange on May 4, 2007 and on the
New York Stock Exchange on or about May 23, 2007.

    INVESTMENT AND FINANCING ACTIVITY

    Achieved 38% pre-leasing at Bay Adelaide Centre development, Toronto,
with the signing of a lease of 170,000 square feet with the Canadian law firm
Goodmans LLP subsequent to the first quarter. Along with the 250,000 square
feet lease signed with KPMG in 2006, Bay Adelaide Centre is 38% pre-leased.
The 1.1 million square foot development is expected to be completed in 2009.

    Disposed of three non-core properties. Atrium on Bay, Toronto, and 2200
and 2204 Walkley Road, Ottawa, were sold for a combined $235 million on a 100%
basis, resulting in a gain of $47 million. Brookfield Properties held a 50%
interest in the 1.2 million square foot Atrium on Bay office and retail
complex and a 25% interest in 2200 and 2204 Walkley Road, Ottawa. The Walkley
Road buildings, totaling approximately 159,000 square feet, were acquired with
the O&Y portfolio in 2005.

    Refinanced One World Financial Center, New York, with a $310 million,
non-recourse 10-year interest-only financing at a rate of 5.83%. This new
financing repaid $300 million full-recourse floating rate financing.

    Increased common share dividend by 11% to $0.56 per share per annum on a
post-split basis. The Board of Directors of Brookfield Properties has modified
its dividend policy to provide for annual dividends of $0.56 per share, taking
into account the announced three-for-two division of the company's common
shares, and beginning with the second quarter dividend for 2007. Payment of
dividends remains at the discretion of the board.

    MANAGEMENT AND BOARD INITIATIVES

    Elected a new director, Diana Taylor, presently managing director at
Wolfensohn & Company, a private investment firm, and formerly the
Superintendent of Banks for the State of New York. Brookfield Properties
extends its sincere appreciation to Dr. William Wheaton who is leaving the
board after three years of service.

    Named Bryan Davis as Senior Vice President and Chief Financial Officer.
Mr. Davis, a Chartered Accountant, was with Brookfield Asset Management (BAM:
NYSE, TSX) for eight years, most recently as a Managing Partner and Senior
Vice President, Finance. Mr. Davis succeeds Craig Laurie who has moved to a
new position at BAM following four years' service as Brookfield Properties'
CFO.

    OPERATING HIGHLIGHTS

    Brookfield Properties leased 1.6 million square feet of space across the
portfolio during the first quarter of 2007. New leases represent 51% of the
total and renewals represent 49% of the total. Major transactions include:

    --  Renewal with Exxon at KBR Tower, Houston, for 145,000 square feet

    --  Renewal and expansion with PricewaterhouseCoopers at Petro-Canada
Centre, Calgary, for 115,000 square feet

    --  New lease with BNP Paribas at Newport Tower, Jersey City, for 110,000
square feet

    --  Renewal with Ministry of the Environment at 40 St. Clair Ave West,
Toronto, for 100,000 square feet

    Brookfield Properties' residential development operations contributed $42
million of net operating income in the first quarter of 2007, surpassing the
$25 million in the first quarter of 2006, as the Alberta marketplace continues
to experience meaningful demand growth.

    OUTLOOK

    "With increasing rental rates and decreasing vacancy rates in all of our
markets, we are well-positioned to take advantage of market conditions through
the lease-up of the portfolio as well as the recapture and re-letting of
under-utilized space. With five developments under construction and another
strong quarter from our residential operations, Brookfield Properties is off
to a solid start in 2007," commented Ric Clark, President & CEO of Brookfield
Properties Corporation.

    Net Operating Income and FFO

    This press release and accompanying financial information make reference
to net operating income and funds from operations ("FFO") on a total and per
share basis. Net operating income is defined as income from property
operations after operating expenses have been deducted, but prior to deducting
financing, administrative and income tax expenses. Brookfield Properties
defines FFO as net income prior to extraordinary items, one-time transaction
costs, future income taxes, non-cash items and depreciation and amortization.
The company uses net operating income and FFO to assess its operating results.
Net operating income is important in assessing operating performance and FFO
is a relevant measure to analyze real estate, as commercial properties
generally appreciate rather than depreciate. The company provides the
components of net operating income and a full reconciliation from net income
to FFO with the financial statements accompanying this press release. The
company reconciles FFO to net income as opposed to cash flow from operating
activities as it believes net income is the most comparable measure. Net
operating income and FFO are both non-GAAP measures which do not have any
standard meaning prescribed by GAAP and therefore may not be comparable to
similar measures presented by other companies.

    Forward-Looking Statements

    This press release, particularly the "Outlook" section, contains
forward-looking statements and information within the meaning of applicable
securities legislation. Although Brookfield Properties 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. Accordingly, the company
cannot give any assurance that its expectations will in fact occur and
cautions that actual results may differ materially from those in the
forward-looking statements. Factors that could cause actual results to differ
materially from those set forth in the forward-looking statements and
information include general economic conditions; local real estate conditions,
including the development of properties in close proximity to the company's
properties; timely leasing of newly-developed properties and re-leasing of
occupied square footage upon expiration; dependence on tenants' financial
condition; the uncertainties of real estate development and acquisition
activity; the ability to effectively integrate acquisitions; including the
acquisition of Trizec Properties, Inc. and Trizec Canada Inc.; interest rates;
availability of equity and debt financing; the impact of newly-adopted
accounting principles on the company's accounting policies and on
period-to-period comparisons of financial results; and other risks and factors
described from time to time in the 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 of Brookfield Properties -
Company and Real Estate Industry Risks," in the company's annual report under
the heading "Management's Discussion and Analysis." The company undertakes no
obligation to publicly update or revise any forward-looking statements or
information, whether as a result of new information, future events or
otherwise.

    Dividend Declaration

    The Board of Directors of Brookfield Properties declared a quarterly
common share dividend of $0.14 per share on a post-split basis payable on June
29, 2007 to shareholders of record at the close of business on June 1, 2007.
Shareholders resident in the United States will receive payment in U.S.
dollars and shareholders resident in Canada will receive their dividends in
Canadian dollars at the exchange rate on the record date, unless they elect
otherwise. The quarterly dividends payable for the Class AAA Series F, G, H,
I, J and K preferred shares were also declared payable on June 29, 2007 to
shareholders of record at the close of business on June 15, 2007.

    Conference Call

    Brookfield Properties' 2007 first quarter investor conference call can be
accessed by teleconference on Friday, April 27, 2007 at 11:00 a.m. Eastern
time at 866-825-3354; pass code 67392161 or by Webcast at
www.brookfieldproperties.com. A podcast of the call is available two hours
after the call at www.brookfieldproperties.com. A replay of this call can be
accessed through May 27, 2007 by dialing 888-286-8010, pass code 56591892.

    Supplemental Information

    Investors, analysts and other interested parties can access Brookfield
Properties' Supplemental Information Package at www.brookfieldproperties.com
under the Investor Relations/Financial Reports section.

    Brookfield Properties Profile

    One of North America's largest commercial real estate companies,
Brookfield Properties Corporation owns, develops and manages premier office
properties. The office properties portfolio is comprised of interests in 113
properties totaling 74 million square feet in the downtown cores of New York,
Boston, Washington, D.C., Los Angeles, Houston, Toronto, Calgary and Ottawa.
Landmark assets include the World Financial Center in Manhattan, BCE Place in
Toronto, Bank of America Plaza in Los Angeles and Bankers Hall in Calgary. The
corporation also holds interests in over 17 million square feet of
high-quality, centrally-located development properties in its major markets.
The corporation's common shares trade on the NYSE and TSX under the symbol
BPO. For more information, visit www.brookfieldproperties.com.

    
    CONSOLIDATED BALANCE SHEET

    ----------------------------------------------------------------------
    (US Millions)                       March 31, 2007   December 31, 2006
    ----------------------------------------------------------------------

    Assets
    Commercial properties                   $  15,195           $  15,287
    Commercial development                        841                 735
    Residential development                       792                 706
    Receivables and other                         878                 974
    Intangible assets                             860                 853
    Restricted cash and deposits                  429                 507
    Cash and cash equivalents                     226                 188
    Assets held for sale(i)                         7                  64
    ----------------------------------------------------------------------
                                            $  19,228           $  19,314
    ----------------------------------------------------------------------

    Liabilities
    Commercial property debt                $  11,142           $  11,185
    Accounts payable and other
     liabilities                                  934                 923
    Intangible liabilities                        884                 919
    Future income tax liability                   591                 584
    Liabilities related to assets held
     for sale(ii)                                   7                  36
    Capital securities - corporate              1,095               1,093
    Capital securities - fund
     subsidiaries                                 786                 803
    Non-controlling interests - fund
     subsidiaries                                 256                 266
    Non-controlling interests - other
     subsidiaries                                  70                  67
    Preferred equity - subsidiaries               331                 326

    Shareholders' equity
    Preferred equity - corporate                   45                  45
    Common equity                               3,087               3,067
    ----------------------------------------------------------------------
                                            $  19,228           $  19,314
    ----------------------------------------------------------------------

    (i) Includes $5 million of commercial properties and $2 million of
     other assets related to assets held for sale at March 31, 2007
     (December 31, 2006 - $64 million and $3 million, respectively).
    (ii) Includes $4 million of commercial property debt and $3 million of
     other liabilities associated with liabilities related to assets held
     for sale at March 31, 2007 (December 31, 2006 - $34 million and $2
     million, respectively).
    

    
    CONSOLIDATED STATEMENT OF INCOME
    ----------------------------------------------------------------------
                                               Three months ended March 31
    (US Millions, except per share amounts)           2007          2006
    ----------------------------------------------------------------------

    Total revenue                                   $   641       $   394
    ----------------------------------------------------------------------

    Net operating income
    Commercial property operations                      317       $   170
    Residential development operations                   42            25
    Interest and other                                    9            13
    ----------------------------------------------------------------------
                                                        368           208
    Expenses
    Interest                                            188            87
    General and administrative                           29            15
    Transaction costs                                     4            --
    Fund interests                                      (19)           --
    Non-controlling interests                             9             4
    Depreciation and amortization                       126            44
    Future income taxes                                  18            27
    ----------------------------------------------------------------------
    Net income from continuing operations           $    13       $    31
    ----------------------------------------------------------------------
    Discontinued operations                              40            18
    ----------------------------------------------------------------------
    Net income                                      $    53       $    49
    ----------------------------------------------------------------------

    Net income per share - diluted
    Continuing operations                           $  0.05       $  0.13
    Discontinued operations                            0.15          0.08
    ----------------------------------------------------------------------
                                                    $  0.20       $  0.21
    ----------------------------------------------------------------------

    Funds from operations per share - diluted
    Prior to property disposition gains             $  0.48       $  0.44
    Property disposition gains                         0.16          0.13
    ----------------------------------------------------------------------
                                                    $  0.64       $  0.57
    ----------------------------------------------------------------------
    

    
    RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
    ----------------------------------------------------------------------
                                              Three months ended March 31
    (US Millions)                                   2007            2006
    ----------------------------------------------------------------------
    Net income                                    $    53         $    49
    Depreciation and amortization(i)                  126              45
    Future income taxes(ii)                            26              39
    Non-cash items included in fund interests         (36)             --
    Transaction costs(iii)                              2              --
    Property disposition gains(iv)                    (42)            (30)
    ----------------------------------------------------------------------
    Funds from operations                         $   129         $   103
    ----------------------------------------------------------------------
    (i) Includes depreciation and amortization from discontinued
     operations of nil and $1 million for the three months ended March 31,
     2007 and March 31, 2006, respectively.
    (ii) Includes future income taxes from discontinued operations of $8
     million and $12 million for the three months ended March 31, 2007 and
     March 31, 2006, respectively.
    (iii) Transaction costs of $4 million, net of non-controlling
     interests of $2 million for the three months ended March 31, 2007.
    (iv) Net of non-controlling interests of $5 million for the three
     months ended March 31, 2007 (March 31, 2006 - nil).
    

    
    FUNDS FROM OPERATIONS PER DILUTED SHARE
    ----------------------------------------------------------------------
                                               Three months ended March 31
    (US Millions, except per share
     information)                                   2007           2006
    ----------------------------------------------------------------------
    Funds from operations                         $    129       $    103
    ----------------------------------------------------------------------
    Preferred share dividends                           (1)            (1)
    ----------------------------------------------------------------------
    Funds available to common shareholders        $    128       $    102
    ----------------------------------------------------------------------
    Weighted average shares outstanding              267.2          233.2
    ----------------------------------------------------------------------
    Funds from operations per share               $   0.48       $   0.44
    ----------------------------------------------------------------------
    

    
    DISCONTINUED OPERATIONS
    ----------------------------------------------------------------------
                                               Three months ended March 31
    (US Millions)                                      2007         2006
    ----------------------------------------------------------------------
    Property disposition gains                       $    47      $    30
    Revenue from properties sold                           3            5
    Operating expenses                                    (2)          (2)
    ----------------------------------------------------------------------
                                                     $    48      $    33
    Interest expense                                      --           (2)
    ----------------------------------------------------------------------
    Funds from discontinued operations and
     gains                                           $    48      $    31
    Depreciation and amortization                         --           (1)
    Future income taxes                                   (8)         (12)
    ----------------------------------------------------------------------
    Discontinued operations                          $    40      $    18
    ----------------------------------------------------------------------
    

    
    COMMERCIAL PROPERTY NET OPERATING INCOME
    ----------------------------------------------------------------------
                                               Three months ended March 31
    (US Millions)                                     2007          2006
    ----------------------------------------------------------------------
    Revenue from continuing operations (i)          $   521       $   292
    ----------------------------------------------------------------------
    Operating expenses                                 (204)         (122)
    ----------------------------------------------------------------------
    Net operating income                            $   317       $   170
    ----------------------------------------------------------------------
    (i) including fee income
    

    
    RESIDENTIAL DEVELOPMENT NET OPERATING INCOME
    ----------------------------------------------------------------------
                                               Three months ended March 31
    (US Millions)                                      2007         2006
    ----------------------------------------------------------------------
    Revenue                                          $   111      $    89
    Operating expenses                                   (69)         (64)
    ----------------------------------------------------------------------
    Net operating income                             $    42      $    25
    ----------------------------------------------------------------------
    

    
    FUND INTERESTS
    ----------------------------------------------------------------------
                                               Three months ended March 31
    (US Millions)                                       2007      2006
    ----------------------------------------------------------------------
    Interest on debt securities                        $    7          --
    Interest on redeemable equity interests                 6          --
    Non-controlling interests                               4          --
    ----------------------------------------------------------------------
                                                           17          --
    Non-cash component                                    (36)         --
    ----------------------------------------------------------------------
    Total fund interests                               $  (19)         --
    ----------------------------------------------------------------------
    




For further information:

For further information: Brookfield Properties Corporation Melissa
Coley, 212-417-7215 Vice President, Investor Relations and Communications
mcoley@brookfieldproperties.com

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BROOKFIELD PROPERTIES CORPORATION

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