Toronto, Ontario, (Marketwire – March 10, 2010) – Brookfield Real Estate Services Fund (the “Fund”) (TSX: BRE.UN) announced today that the royalties for the quarter ending December 31, 2009, was $ 8.5 million, an increase of 9.8 % compared to the same period in 2008. Cash1 distribution during the quarter rose to $ 5.9 million, up 10.6% from the fourth quarter of 2008, while distributable cash per unit increased 15.0% or $ 0.06 per unit for 0.46 U.S. dollars per unit and is due partly to the low number of units outstanding resulting from the success of natural origin, of course, try the program, which was completed in July 2009. The net profit to $ 1.5 million ($ 0.16 per unit) of $ 0.2 million ($ 0.02 per unit) in the fourth quarter of 2008.
Results for the quarter represented respectively in the second quarter of the year over year revenue increases following two quarters of lower earnings experienced earlier this year. Year over year increase in revenue and a corresponding increase in the distribution of cash in the fourth quarter reflects a noticeable increase in the Canadian residential real estate markets during that time period. Year net profit for the year and increased the expense of a reduction in consumption and recorded an unrealized gain on interest rate swap, and these derivatives are required to be valued at market value in accordance with generally accepted accounting principles.
For the fiscal year 2009, revenues were $ 34.4 million, increased by 1.5% less than the previous year, and cash distribution to $ 23.9 million, down 2.1% from fiscal year 2008. Net profit of $ 5.6 million of 5.9% over 2008, with the decline in revenues was more than offset by unrealized gains recorded on the exchange of interest rates and income tax recovery.
Fixed Fees, which are related primarily to the size of the fund agents ® network, were stable throughout the year, while the variable royalties for the year decreased by 5.0% over the same period in 2008 compared with an increase of 13% in the Canadian market activity. Change in the Fund royalties variable did not follow the increase in the Canadian market is mainly due to the delayed approximately 45 to 60 days between the activity in the market which say the home is sold and the Fund a variable fee that is recorded upon the sale of the house closed. As a result of this delay the impact of a large part of the network participation of the Fund per year, more than 90% annual increase in dollar volume of transactions in the fourth quarter of 2009 and are expected to be realized as a variable charge in the first quarter of 2010. Change in the fee variable is further easing of the factors that maximize revenue $ 1,300 per year and an increase in the market does not increase the fees of these factors after they have reached the maximum. In 2009, 17 per cent of agents in the network reached the maximum royalties.
The following is a summary of our fourth quarter and year-end results
A summary of our fourth quarter and year-end results
The fourth quarter
———————
2009 2008
———————
(Per
(In thousands) unit) (in thousands) (per unit)
———————
Royalties $ 8,495 $ 0.66 $ 7.740 $ 0.58
Net
Profit $ 1,511 $ 0.16 $ 200 $ 0.02
Distribution
Cash $ 5,873 $ 0.46 $ 5.310 $ 0.40
Distributions $ 4,969 $ 0.39 $ 4.647 $ 0.35
The payment of compensation (4) 85% 87%
The year ended December 31,
———————
2009 2008
———————
(Per
(In thousands) unit) (in thousands) (per unit)
———————
Royalties $ 34,359 $ 2.65 $ 34,883 $ 2.62
Net
Profit $ 5,579 $ 0.58 $ 5.270 $ 0.53
Distribution
Cash $ 23,926 $ 1.85 $ 24,437 $ 1.84
Distributions $ 18,633 $ 1.44 $ 17,452 $ 1.31
The payment of compensation (4) 78% 71%
(1) Defined as royalties less administrative expenses and interest expense
And management fees. The distribution of cash does not have a unified
Meaning under Canadian generally accepted accounting principles.
It is believed that cash management is the distributable useful complementary
A measure of performance, as it provides investors with an indication of
The amount of cash for distribution to unitholders. Investors
He warned that the distribution of cash should not be construed as
An alternative to using net income as a measure of profitability
Or cash flow statement.
(2) Realtor ® identification mark in the real estate licensing
Canada who are members of the Canadian Association of Real Estate.
(3) The term multi-® stands for multimedia service »and is
Is a registered trademark of CREA.
(4), which represents a dividend payout as a percentage of funds available for distribution.
“Brands survived on the market well, and as a company we were prepared to take advantage of the subsequent recovery,” said Phil Soper, president and CEO. “The fund is weighted towards the fee structure that is fixed in nature, a structure which has proven effective in alleviating the sharp fluctuations that occasionally occur in our industry. This feature, along with the initiatives we have taken to prepare for the Realtors ® we have to lower the housing market, which resulted in very satisfactory performance during the first overall decline in the market for about 15 years, achieving excellent results during the strong recovery that followed. As the year began, and we correctly anticipated that first-time buyers would lead to recovery, and helped our marketing efforts have the goal of a network of agents this group in early recovery, before the spread of demand for other sectors of the market. ”
Fund a network of experienced workers to drain the first three quarters of 2009, but regained its organic growth in the fourth quarter, with the addition of 64 Realtors ®. 21 with access to a concession agreement with 417 Realtors ® to take effect January 1, 2010, the Fund Network had increased by 138 Realtors ® since January 1, 2009. ”
During the fourth quarter of 2009, the Fund experienced a net gain membership of 64 brokers ®, resulting in a net loss of $ 279 organic Realtors ® during the fiscal year ended December 31, 2009. With the addition of 316 Realtors ® from 21 concession agreements obtained by the Fund in January 1, 2009, the Fund was a net increase of 37 Realtors ® since December 31, 2008. In the December 31, 2009, the network consists of 349 fund is independently owned and operated by the privileges operates 647 locations served by +14,631 Realtors ® with an approximate 22% share of the Canadian residential real estate market on the basis of dollar volume of transactions.
In January 1, 2010, the Fund acquired from the fund manager, Brookfield Real Estate Services Limited ( “Director”), 21 concession agreements with brokers ® 417 (1) under the title, and Los Angeles Lepage Capitale brands. These acquisitions increase the Fund’s network of agents +15,048, which compares with 14,910 in January 1, 2009.
A monthly cash dividend
Brookfield Real Estate Services today announced the distribution of the IMF U.S. $ 0.117 per unit for the month of March 2010, payable April 30, 2010 to unitholders of record March 31, 2010.
In February, the Fund completed its obligations to refinance the $ 53 million of debt by offering $ 32.7 million in private with a number of Canadian institutional investors, with interest fixed at 5.809%, reaching $ 20.3 million with interest banking facilities available in the form of a floating rate prime minister in addition to 1.50%, or Banker acceptance rates plus 3% with a repayment period of up to six months. Financing is provided under a five-year term, with the payment of interest every three months in arrears. There were not substantial changes in the covenants associated with the facilities refinanced debt.
“We expect Canada’s residential property market to remain strong in an extraordinary over the first half of 2010, economic conditions in all parts of the country and improve the impact of incentives on low interest rates continue to stimulate demand. There are a number of factors are expected to bring back to the balance in the market in the second half of this year, when the average house price appreciation that is expected to decline significantly. These factors include the gradual erosion of affordability due to high house prices and expected a modest upward movement of interest rates and an improvement in the display lists and more Canadians feel confident in the economy and we are ready to list their homes and move. stricter standards for mortgage approvals and other similar measures will be implemented in the spring of this year by the federal government will contribute to the mitigation of the demand. We support these modest measures designed to help protect consumers from becoming overleveraged, “said Soper.
Canadian Real Estate Association (CREA) has forecast that a multi-activity will increase by 13.3% to a record low in 2010, and the national average house price will increase by 5.4%, with average price gains expected in all governorates. During the second half of the year, CREA expects national activity and the downward trend and pent-up demand is to reduce the interest rates start to rise, and coordinated the sales tax into effect in Ontario signed. Looking to 2011, CREA expects the average price to decline by 1.5%, with the average price of modest gains in all provinces except BC. And Ontario.
“Our strategy is to continue to grow through the expansion of our network Realtor ® membership through recruitment and agent through acquisitions, and improve retention rates and agent and broker ® through increased productivity. We have a multi-brand strategy to improve our access to different market segments, which were very successful in Canada. with the Director of the Fund in the United States in recent acquisitions list, the Fund will have the opportunity to consider expanding its scope to include the huge markets of the United States and abroad, “said Mr. Soper.
Fund generates all the elements of fixed and variable fee. Variable fees are primarily driven by the total dollar volume of transactions and sales agent commissions, while fixed franchise fees based on the number of agents and sales representatives in the network. About 69% of the proceeds of the Fund on the basis of fees that are fixed in nature, which provides stability and helps to isolate the Fund’s income from market volatility.
There is a conference call for investors, analysts and media to re-examine in the fourth quarter of the year, and the final results will be on Wednesday, March 10th, 2010, at 10:00 am (Eastern Time). To participate in the conference call, please dial
1-800-319-4610 toll nearly five minutes before the call free. For those unable to participate in a telephone news conference, and will be available by webcast and replay will also be published on the Internet in the wake of a telephone news conference in brookfieldres.com under the heading “news and events.”
About Brookfield Real Estate Services Fund
Fund is the leading provider of services to residential real estate brokers, real ®. Fund generates cash flow from franchise royalties and service fees derived from the national network of real estate brokers and agents in Canada operating under the Royal LePage, the Capitale Real Estate Network and Johnston and Daniel brands. In January 1, 2010, the network consists of the Fund +15,048 customers. Network Fund estimated at about 22% of the share of the Canadian residential resale real estate market on the basis of the dollar volume of transactions. The Fund is listed on the Tokyo Stock Exchange on the income trust that pays monthly distributions and trades under the symbol “BRE.UN”. Fund website address is brookfieldres.com
Forward-looking statements
This quarterly press release includes forward-looking information and other “forward-looking statements.” Words such as “should”, “will”, “continue”, “plan,” “believe,” “expect”, “expect”, “intends”, “estimate” and other expressions that indicate future events, or predictions, trends and which do not relate to historical matters identify forward-looking statements. And should be drawn can not be placed on forward-looking statements because they involve a risk of known and unknown, uncertainties and other factors, which may cause actual results, performance or achievements of the Fund to differ materially from anticipated future results, performance or achievement expressed or implied These forward-looking statements. Factors that could cause actual results to differ materially from those presented in the forward-looking statements involve a change in general economic conditions, interest rates, consumer confidence, the level of residential resale transactions, the average commission rate, competition from other traditional real estate brokers or from discount and and / or Internet-based alternatives and real estate, and the availability of procurement opportunities and / or closure of existing offices and real estate, and other real developments in the real estate industry and residential brokerage or fund to reduce the number and / or royalties from the income of the Fund Realtors ®, our ability to maintain brand equity trade through the use of trademarks, and the availability of equity and debt financing, and a change in tax provisions, and other risks detailed in the Fund’s annual information form, which is deposited with the securities commissions and dissemination will be conducted in sedar.com. Fund undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law.
Brookfield Real Estate Services Fund
Consolidated Balance
As in the December 31, 2009 and 2008
(Thousands of dollars) 2009 2008
————————
Repeat
(See footnote 6)
Assets
Current assets
Cash $ 6,842 $ 7,924
Accounts receivable 3,267 3,224
Prepaid expenses – 145
————————
10109 11.293
Intangible assets (note 5) 114.840 +127980
————————
$ 124,949 $ 139,273
————————
————————
Unitholders liabilities and equity
Current Liabilities
Accounts payable and accrued
Liabilities $ 3,079 $ 2,551
Purchase obligation – current
Part (note 4) 2,219 3,031
Distribution payable to unitholders 1,489 1,148
Financial derivatives (note 
101 –
————————
6.888 6.730
Long-term debt (note +52953 51.615
Purchase obligation (note 4) 1,924 3,180
Financial derivatives (note – 365
Responsibility in the future income tax (note 6) 2,079 2,526
Non-controlling interest (note 9) 17061 19.701
————————
80905 84.117
Unitholders equity 44044 +55156
————————
$ 124,949 $ 139,273
————————
See the notes to the consolidated financial statements
Brookfield Real Estate Services Fund
Consolidated statements of earnings and
Including profit
The year ended December 31 (Thousands of
Dollars, except unit and per unit amounts) 2009 2008
———————–
Royalties
Fixed royalties $ 17,842 $ 17,698
Franchise fees 7,875 8,291 Variable
Premium royalties +4355 4.450
Other income and services 4,287 4,444
———————–
34359 34.883
———————–
———————–
Expenditure
Administration 866 817
Management fee (note 3) 6.365 +6455
Interest expense 3,202 3,174
Other (income) loss (note (264) 365
Amortization of intangible assets
(Note 5) +16997 16886
———————–
27166 27.697
———————–
———————–
Earnings before taxes on income and other
Predominantly 7.193 7.186
Future income tax recovery (note 6) 551 48
———————–
Earnings before non-controlling interest 7.744 +7234
Non-controlling interest (note 9) (2,165) (1,964)
———————–
———————–
Net earnings and comprehensive $ 5,579 $ 5,270
———————–
Basic and diluted earnings per unit
(+9594500 Units weighted average)
(2008 – 9,974,391 units) (note 11) $ 0.58 $ 0.53
———————–
———————–
See the notes to the consolidated financial statements
Data collected from Unitholders’ equity
Con
Unit – tribu –
(In the owners Ted
Thousands of Aceh fence and distributed by net
Of dollars) bution butions profit plus total disability
————————–
Balance,
January
1, 2008 $ 92.938 $ – $ 21,224 $ (49,960) $ (28,736 ($ 64,202
Changes
During
The
Year:
Source
repur –
Chases
(Note 10) (1,637) 404 -: – - (1,233)
Net
Earnings – - 5.270 to 5.270 5,270
Unit
Distributed –
butions – - – (+13083) (13083) (13083)
————————–
Balance,
December
31, 2008 $ 91,301 $ 404 $ 26,494 $ (63.043) $ (36.549) $ 55,156
————————–
————————–
Balance,
January
1, 2009 $ 91,301 $ 404 $ 26,494 $ (63.043) $ (36549) $ 55,156
Changes
During
The
Year:
Source
repur –
Chases
(Note 10) (3,354) 491 – - – (2,863)
Net
Earnings – - 5.579 to 5.579 5,579
Unit
Distributed –
butions – - – (13,828) (13828) (13,828)
————————–
Balance,
December
31, 2009 $ 87,947 $ 895 $ 32,073 $ (76,871) $ (44,798) $ 44,044
————————–
————————–
There is no accumulation of other comprehensive income or loss for the Fund.
See the notes to the consolidated financial statements
Brookfield Real Estate Services Fund
Data collected from the cash flows
The year ended December 31 (Thousands of
United States dollars) 2009 2008
———————-
Cash provided by (used in):
Operating activities
Net profit for the year $ 5,579 $ 5,270
Non-monetary items that affect
Non-controlling interest 2,165 1,964
Future income tax (551) (48)
Non-cash interest expense (note 344 283
Change in the value derived from (264) 365
Consumption of intangible assets 16.997 16.886
———————-
24.270 24.720
Changes in non-cash working capital
(Note 13) 1,440 (546)
———————-
25.710 24.174
———————-
Investment activities
Purchase of intangible assets (Note
4) (2.770) (16.984)
Pay the purchase price
Obligation (note 4) (3.051) (2.295)
———————-
(5.821) (+19279)
———————-
Financing activities
Repurchase units of the Fund (note 10) (3,805) (291)
Proceeds of the facilities (Note
994 13.715
Distributions paid for the unitholders (13487) (12933)
Distributions paid to non -
A controlling interest (+4673) (4.978)
———————-
(20.971) (4.487)
———————-
(Decrease) increase in cash during the
Year (1,082) 408
Cash, and the beginning of year 7,924 7,516
———————-
Cash at the end of year $ 6,842 $ 7,924
———————-
Supplementary information Cash Flow
Interest paid $ 2,858 $ 2,942
———————-
See the notes to the consolidated financial statements
Brookfield Real Estate Services Fund
The notes to the consolidated financial statements
December 31, 2009 and 2008 (Thousands of dollars)
Brookfield Real Estate Services Fund (the “Fund”) is a limited purpose trust established under the laws of the Province of Ontario, pursuant to the Amended and Restated Declaration of Trust. On August 7, 2003 and raised in the Fund $ 99,830 (before issue costs) through the issuance of units in the Toronto Stock Exchange. This proceeds with the term loan proceeds were used to obtain the concession agreements, and relationships and trademark rights.
2. Significant accounting policies
Basis of presentation
These consolidated financial statements include the accounts of the Fund Brookfield Real Estate Services, a wholly owned subsidiary of Liberty accuracy Holding Trust ( “RLHT”), and 75% owned subsidiary, Residential income to the General Fund limited partners ( “RIFGP”), Residential Income Fund LP (the “Partnership”), 9120 Real Estate Network, LP ( “LCLP”), a wholly-owned subsidiary of the partnership, and 9188-5517 Quebec Inc., “a partner of the year LCLP”. RIFGP Director-General is a partner of the partnership. Trilon Bancorp Inc. ( “non-controlling interest”) owns the remaining 25% interest in the partnership and RIFGP. The Fund receives certain management, administrative and support services from Brookfield Real Estate Services Limited. ( “BRESL”), a party related to the non-controlling interest through common control. Royal LePage Real Estate Services Ltd. ( “precision”), a wholly owned subsidiary of BRESL, pay royalties to the Fund under a franchise agreement.
The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles ( “GAAP”). The Fund’s significant accounting policies are as follows:
The adoption of new accounting policies
And adopted the following criteria to take effect January 1, 2009:
(A) Section) 3064, intangible assets and goodwill, to replace Section 3062, Goodwill and other intangible assets and Section 3450, the costs of research and development. This section, with effect from January 1, 2009, to establish the criteria for recognition, measurement, presentation and disclosure of goodwill and intangible assets, including intangible assets developed internally. With the provisions of this section have been adopted retroactively. The adoption of this section did not have a significant impact on the consolidated financial statements of the Fund or the book value of intangible assets.
B) Emerging Issues Committee ( “the energy industry”) 173 the energy industry, credit risk, and the fair value of assets and financial liabilities. This summary concludes that the entity itself to credit risk and credit risk of the counterparty should be taken into account when determining the fair value of financial assets and liabilities including derivative financial instruments. This conclusion is to apply to all assets and financial liabilities at fair value in the interim and annual financial statements for the periods ending on or after January 20, 2009. The adoption of this summary does not have a significant impact on the Fund’s consolidated financial statements.
C) Section 3862, Financial Instruments – Disclosures. In June 2009, the Conference amended section 3862 to improve the fair value, and disclosure of liquidity risk. Section 3862 now requires that all financial instruments at fair value can be classified into one of three levels of hierarchy, described below, for the purposes of disclosure. Each level on the basis of transparency on the inputs used to measure the fair value of assets and liabilities:
- Level 1 – inputs unadjusted quoted prices of similar instruments in active markets.
- Level 2 – inputs other than quoted prices included in Level 1 that can be observed in the assets or liabilities, either directly or indirectly.
- Level 3 – inputs used in the evaluation method is not based on market data can be observed in determining the fair values of the instruments.
Determine the fair value hierarchy requires the use of the resulting observable market data where available. Classification of financial instruments in the hierarchy based on the lowest level of inputs that are important to measure the fair value. Fund has also enhanced the detection of liquidity, including sources of funding. Additional disclosures required as a result of the adoption of these standards are included in note 14 to the consolidated financial statements.
Franchise fees are usually based on a percentage of total revenue agent ( “variable franchise fee”) to the maximum specified in addition to the amount of dollars per worker ( “fixed franchise fee”). Total income is the total commission income (net of payments and outside broker) paid with respect to residential real estate transactions closed resale real. Royalty income variable at the time to re-sell residential real estate transaction is closed or the lease signed by the seller or lessor. Franchise fees fixed income as it happened.
Premium franchise fees are calculated as a percentage ranging between 1% and 5% gross income of an agent of a committee to choose the number of locations in the election. These fees are recognized as income at the time of re-sale residential real estate transaction is closed or the lease signed by the seller or lessor.
Other charges on the basis of income are generally recognized as income when the related services had been provided. Any prepaid for the future are recorded as deferred income. Deferred income as at December 31, 2009
$ 111 (2008 – 140 dollars).
Intangible assets, consisting of franchise agreements, relationships and the rights of registered trademarks and cost less accumulated depreciation. Concession agreements are amortized over a period of the agreements using the effective rate.
Relationships are amortized over a period of one for renewal, at the beginning of that period, using the effective rate method. Trademarks are amortized on a straight-line basis over a period of renewal of the agreement plus one, if applicable. UNFPA to review the book value of intangible assets of vulnerability whenever events or circumstances indicate the carrying amount exceeds the undiscounted cash flows expected from the life of the concession agreements, relationships and trademarks. If weakness is determined to exist, and intangible assets, which are written on the basis of fair value.
3.
4.
2008
Concession
Relations
As follows:
Purchase
Purchase
Purchase
Purchase
5.
December 31, 2009
————————-
————————-
————————-
————————-
December 31, 2008
Concession
Relations
And
Concession
Relations
And
6.
2008
7.
9.
11.
12.
13.
14.
15.
16.
Income
Income
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