Calgary, Alberta – (BRP: NYSE/TSX) Brookfield Residential Properties Inc. (“Brookfield Residential”) today announced financial results for the first quarter ended March 31, 2012. The financial results are based on U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Letter to Shareholders and the Company’s Supplemental Information contain further information on the Company’s strategy, accomplishments, outlook, operations and financial results. Shareholders are encouraged to read these documents, which are available on the Company’s website at www.brookfieldrp.com.
“When one takes out the non-recurring income in last year’s first quarter results arising from the merger, our performance this quarter is much stronger than last year. Also, improvements in net new orders and backlog set the stage for continued improved performance as the year progresses,” commented Alan Norris, President and CEO of Brookfield Residential.
FINANCIAL HIGHLIGHTS
Results of Operations
| Three months endedMarch 31 | ||
| (US$ millions except per share amounts) |
2012
|
2011
|
| Total revenue |
$ 132 |
$ 180 |
| Income before income taxes |
4 | 26 |
| Income tax expense |
(4) |
(84) |
| Net income / (loss) attributable to Brookfield Residential |
1 |
(57) |
| Basic income / (loss) per share |
$ 0.01 | $ (0.56) |
| Diluted income / (loss) per share |
$ 0.01 | $ (0.56) |
| Total assets |
$2,670 |
$ 2,555 |
| Total liabilities |
1,651 |
1,592 |
Net income for the three months ended March 31, 2012 totaled $1 million or $0.01 per share, compared to a net loss of $57 million or $0.56 per share for the three months ended March 31, 2011. The first quarter of 2011 included a one-time valuation allowance against the Company’s U.S. deferred tax assets on the completion of the merger.
The 2011 financial statements represented the first year-end as a public company and reflected non-recurring items as a result of the merger that impacted revenue and net income. Specifically, the first quarter of 2011 included $26 million of income before tax from a non-recurring change in business practice. In addition, the first quarter of 2012 included $9 million of interest on the transaction debt that was not included in the comparable period in 2011. Taking these items into account, income before income taxes improved $13 million on a comparable basis over the same period in 2011 reflecting improved operating results on a quarter-over-quarter basis.
| Three months endedMarch 31 | ||
| (US$ millions) |
2012
|
2011
|
| Income before income taxes |
$ 4 |
$ 26 |
| Non-recurring land income |
– | (26) |
| Transaction debt interest expense |
9 |
– |
| Comparable income before taxes |
$ 13 |
$ – |
First Quarter of Operational Highlights
| (US$ millions, except per unit activity) |
Three months ended March 31 | |
| Operating Data |
2012
|
2011
|
| Land revenue - Normalized |
$ 44 |
$ 36 |
| Lot closings - Normalized(units) |
281 | 233 |
| Land revenue - Non-Recurring |
– | 61 |
| Lot closings - Non-Recurring(units) |
– | 360 |
| Average land selling price(per lot equivalent) |
$ 157,000 |
$ 163,000 |
| Housing revenue |
$ 88 |
$ 83 |
| Home closings for Brookfield Residential(units) |
251 | 220 |
| Home closings for unconsolidated entities(units) |
10 | 3 |
| Average home selling price(per unit) |
$ 351,000 |
$ 380,000 |
| Net new home orders for Brookfield Residential(units) |
474 | 382 |
| Net new home orders for unconsolidated entities(units) |
18 | – |
| Backlog of homes for Brookfield Residential(units at end of period) |
868 | 537 |
| Backlog of homes for unconsolidated entities(units at end of period) | 22 |
– |
For the three months ended March 31, 2012, land revenue totaled $44 million, compared to $97 million for the same period of 2011. Approximately $61 million of the revenue from 2011 was due to the change in business practice referred to above. Excluding the non-recurring revenue, normalized land revenue for the three months ended March 31, 2012 increased by $8 million or 22% in comparison to the same period of 2011. This increase was driven by increased lot sales in Canada, with 281 lot closings for the three months ended March 31, 2012 compared to 233 during the same period in 2011.
For the three months ended March 31, 2012, housing revenue increased to $88 million from $83 million for the same period of 2011 as a result of increased home closings. In addition, the 24% increase in net new home orders in the first quarter, particularly in Canada and the Washington D.C. Area, has resulted in a higher backlog of 868 homes at March 31, 2012 compared to 537 homes for the same period in 2011, a 62% increase over the same period in 2011.
OUTLOOK
“Our view for 2012 is positive. We believe that improving markets in North America, combined with the opening of several new communities in the U.S., some commercial parcel sales and executing on our excellent sales backlog, will result in our 2012 normal operating income improving over 2011 and replacing some of the non-recurring income of 2011,” commented Alan Norris, President and CEO of Brookfield Residential.
ADDITIONAL INFORMATION
Brookfield Residential comprises the assets formerly owned by Brookfield Office Properties’ residential land and housing division and Brookfield Homes Corporation. As these entities were deemed to be under common control, the 2011 first quarter comparative information has been presented based on the combined financial results of these entities.
The Letter to Shareholders and the Company’s Supplemental Information for the quarter ended March 31, 2012 contain further information on the Company’s strategy, operations, financial results and outlook. Shareholders are encouraged to read these documents, which are available on the Company’s website at www.brookfieldrp.com.
The attached financial statements are based primarily on information that has been extracted from our financial statements for the three months ended March 31, 2012, which have been prepared using the standards and interpretations currently issued under U.S. Generally Accepted Accounting Principles.
Brookfield Residential Properties Inc. is a North American land developer and homebuilder, active in ten principal markets with over 100,000 lots controlled. We entitle and develop land and build homes for our own communities, as well as sell lots to third-party builders. The Company is listed on the New York Stock Exchange and the Toronto Stock Exchange under the symbol BRP. For more information, please visit our website at www.brookfieldrp.com.
Please note that Brookfield Residential’s unaudited quarterly reports and audited annual report are filed on EDGAR and SEDAR and can also be found in the investor section of our website at www.brookfieldrp.com. Hard copies of the quarterly and annual reports can be obtained free of charge upon request.
For more information, please visit our website at www.brookfieldrp.com or contact:
| Investors: Nicole French Manager, Investor Relations & Communications Tel.: (403) 231-8952 Email: nicole.french@brookfieldrp.com |
Media: Andrew Willis SVP, Communications & Media Tel.: (416) 369-8236 Email: andrew.willis@brookfield.com |