BROOKFIELD ASSET MANAGEMENT LTD (BAM) 2004 Q2 法說會逐字稿

Good afternoon and welcome to the Brascan Corporation second quarter results conference call, August 5th, 2004. Your host for today's call will be Mr. Bruce Flatt, President and CEO of Brascan Corporation. Mr. Flatt, please go ahead.

Good afternoon. Thank you, everyone, for joining us in the summer. It's Bruce Flatt speaking, in the room with me are Brian Lawson, our Chief Financial Officer; Brian Davis, our Senior Vice President of Finance; and Katherine Vyse, who is our Head of Investor Relations and Communications. This afternoon, Brian Lawson will cover our operational and financial highlights in the quarter and then I'll cover a few specific topics, following which we would be happy to answer any questions you may have. With that, I'll turn it over to Brian and he will go through those results.

Thank you, Bruce. I will start off with an overall review of our financial results and then I'll discuss the highlights within our various operations. We're very pleased with the results during the quarter. Cash flow totalled $178 million, 64 cents per share, and that's up 35% from the same quarter last year. Our net income was $189 million, that's 67 cents per share, and that compares with $63 million this time last year.

We experienced growth in a number of areas. Specific highlights include a substantial increase in the contribution from our power-generating operations reflecting much better water conditions. Strong commercial property results, which included a gain on the releasing of a major block of commercial property space in Manhattan. And a significant improvement in the operating results of Noranda and Norbord led by strong prices for both metal and panel board product. Furthermore, all of our operations continue to meet their operational and financial targets and we expect to report good results for the balance of the year.

Turning to our real estate operations, they contributed $225 million for the quarter, up from $191 million in the same quarter last year. The strength of our lease profile, which continues to be one of the best in the premier office property sector ensures that we continue to produce stable growing results. And the addition of our 300 Madison Avenue property, as well as the 2 new Washington properties has more than offset net operating income associated with the half interest in 245 Park Avenue, which we sold late last year. The net operating income from these activities was $169 million during the quarter, compared with $157 million.

We are seeing increased leasing momentum after 2 years of slower activity in the overall market. During the first 6 months, we leased 1.7 million square feet. This includes 1.3 million square feet in Manhattan leased to 2 new tenants, PriceWaterhouseCoopers and Cadwalader Wickersham & Taft. We also completed major leases at BCE Place in Toronto with TD Canada Trust, and also in Minneapolis. Bruce will comment on our move into new markets in a few minutes.

Our residential property operations continued to benefit from robust consumer demand, driven by relatively low interest rates and the improving economy. These strong conditions, together with an increased number of active communities within our operations, contributed to an increase in lot and home sales during the first 6 months. The net operating income for the second quarter was $48 million compared with $23 million this time last year. On the other hand, we have not completed any bulk lot sales so far this year, which contributed $7 million in the same period last year. However, we will continue to pursue these opportunities during the balance of the year in order to capitalize on strong current values, a number of substantial development approvals were received in the first half, enabling us to convert land owned and underoption into entitled lots. And this obviously bodes well for the future results of our business.

Our real estate advisory group was very active in the first 6 months. They were retained to sell 3 large portfolios of office and industrial properties, totaling roughly $1 billion in value, and has been awarded a number of public and private assignments which are currently in process. This group has established a solid reputation with the clients who benefit from our real estate expertise, and the capital that we will provide to facilitate transactions.

Turning to our power generating operations, these benefited significantly from improved water conditions, resulting in a contribution of $71 million, up from $44 million last year. Water levels were modestly above average during the quarter and well above average for the first 6 months of the year. And we also benefited from the acquisition of additional facilities during the first quarter. Our generation in the quarter was approximately 2,100 gigawatt hours, compared with 1,600 gigawatt hours last year. We continue to have prices for over 80% of our projected revenues locked in on the long-term contracts, with an average life of 13 years. This approach served us well in the recent quarter as we were relatively unaffected by lower market prices. In addition, water levels remain high, so we expect to record good results for the balance of the year. The results I just mentioned do not include the 70 hydro facilities in New York State we recently agreed to acquire, which will add roughly 750 gigawatt hours of production on a quarterly basis. Bruce will comment further on our strategic initiatives in this sector.

In funds management, we made further progress in expanding this business. The contribution increased to $56 million for the quarter from $49 million last year. We experienced improved results pretty much across the board, particularly in our bridge lending and real estate finance groups. The Brascan Real Estate Finance Fund closed its initial fund raising which totalled $560 million, including $200 million from Brascan. And our Real Estate Opportunity Group continues to pursue a number of opportunities, although valuations remain high relative to our return objectives, this group is well-positioned with flexible capital and substantial transaction expertise.

Noranda and Norbord both reported very strong results for the second quarter, which together contributed nearly $100 million to our net income. These companies benefited from strong metal prices and panel board prices for these products. Noranda reported net income of $107 million for the current quarter compared with a loss of $11 million last year. While Norbord reported net income of $127 million this quarter compared with a break-even during the same quarter last year.

And I will just quickly report on a few corporate matters before turning things over to Bruce. We renewed our normal course issuer bid, which will permit us to purchase up to 21 million more shares during the next 8 months. We did repurchase roughly 800,000 shares so far this year at an average cost of $23.35 per share. And we will continue to look at buying back our stock at discounts to our underlying value, which we calculated to be $30.35 at the end of the second quarter. We also declared our regular quarterly dividend of U.S. 14 cents per share, which will be paid November 30th this year to shareholders of record on November 1st. Now, I will turn the call over to Bruce who will review a number of our strategic initiatives.

Thanks, Brian. I thought today I would address 4 topics which we felt might be of interest to our shareholders and others on the phone. The first 2 topics are related to expansion of the core operations in power and real estate. And the other 2 are related to work we're doing on servicing value within our investments in the Company. Lastly, I'll make just a few comments on capital allocation.

First, with respect to our power operations, we announced during the quarter, as Brian mentioned, and we're in the final stages of acquiring 71 hydroelectric power plants with 674 megawatts of electricity, all of them located in New York State for $900 million. The acquisition is really in furtherance of the strategy of acquiring and operating what we have today, which are low-cost, high-quality hydro assets in the Northeast. The facilities in the market they are in are interconnected into our existing markets, and as a result, we should be able to create value over time in addition to the asset value being purchased through operating flexibility and the ability to market our electricity in those marketplaces.

We're on track to close at the end of this month that acquisition, and it will increase our generating capacity to 2,700 gigawatt hours per year and the number of plants to 120. To date we have sold close to 50% of the assured capacity forward for the next couple of years. More than locking in the returns on our pro formas when we committed to the acquisition, and taking some of the risk out of the transaction.

We continue to review opportunities to optimize the operations we own within the portfolio today. And we're also looking at a number of acquisition opportunities primarily in the Northeast U.S., which would integrate into our current system. Which will further enhance the portfolio plans we have. In addition, we are reviewing Ontario government's recently released request for proposals to build new capacity in this supply constrained market, and there may be opportunities to expand our presence through these initiatives.

With respect to the expansion of our real estate operations, I guess the second thing I wanted to speak of, we continue to explore opportunities to expand our presence in supply constrained office markets with strong long-term fundamentals. Really the strategy we've set out many years ago. The 2 new markets where we've chosen to focus our efforts, in addition to our current core markets are Washington, D.C. and in London, England. In Washington, we recently purchased 2 office properties totaling just over a million square feet and we continue to look at other opportunities in that market.

With respect to Canary Wharf, as you know, I think probably during the quarter we were not successful in acquiring with partners 100% of Canary Wharf. However, we were successful in increasing our net interest in the 17 properties owned by Canary Wharf through buying more shares to 17%. Our total invested cost is just under $500 million, and in essence, we own an indirect interest in approximately 2.4 million square feet of some of the finest office properties and development sites in London. And as long-term real estate owners, we believe that the London market will recover in the next few years and that further development of the Canary Wharf estate will enhance the value of our investment that is there. We hope to assist our partners in this investment to create value at Canary Wharf.

Moving to our investments and dealing first with Nexfor. At the end of the second quarter, we were successful in creating 2 pure play investment companies by separating our 42% interest in Norbord from the other interest in the company, and we now own 42% of Frazier [ph] Paper. So we own 2 separate public companies and have our original interest of 42 in each. Specifically, at Norbord, Norbord is a unique global panel board company with a record of significant earnings and cash flow growth and top quartile performance over the last almost decade.

Frazier [ph] Paper, which is separately traded, is a North American specialty paper company, well-positioned to benefit from the rebound in paper prices which we think is starting to and should occur over the next number of years. The formation of these 2 pure play companies will enable the respective management teams to leverage their operating expertise, both of them unburdened by the financial affairs of what became really an unrelated business for each of them. In addition, it increases all shareholders flexibility for their own investment needs, including ours. Should we wish to pursue options with respect to our investments in these businesses in the future.

Lastly, on the investment side, with respect to Noranda, there isn't too much we can say, other than what has been said and publicly stated in a Noranda press release issued during the quarter. During the quarter, Noranda announced that its Board had commenced a review of various means of maximizing shareholder value following receipt of expressions of interest in the company from several potential acquirers. This process continues. And we are supportive of the efforts of Noranda and it's special committee. It should be noted that the special committee was constituted by the Board of Noranda and is working on behalf of all shareholders. The Noranda special committee will report to shareholders when there is definitive information to report.

Lastly, I'll just comment on capital allocation and turn it back to the operator for questions. Because we often get asked questions on this, obviously, very important matter to a company. Looking forward, we will continue to deploy capital in the Company in as disciplined fashion as we can and as we've tried to do in past. Should we be faced in the future with excess cash and/or capital in the Company, we will continue to review the alternatives of reinvesting the capital into our core operations, repurchasing shares or increasing dividends to shareholders. We understand very well that a big part of any company is the future redeployment of capital. We intend to keep our eye on this. And to manage the Company to ensure we increase the underlying value of the Company and the cash flows generated from the operations on a per share basis. Each decision we make in the Company will be guided by this overriding goal in mind.

With that, I'll turn it back to the operator. And we would be happy to take your questions, if there are any.

To place yourself in the question queue, please press star 1 on your touchtone phone. If using a speakerphone, please pick up your handset and then press star 1. To withdraw your request, press star 2. Please go ahead if you have any questions. Your first question comes from Andrew Kuske. Please go ahead.

Thank you. Good afternoon. Bruce, you made a comment and the comment actually appears in the press release, that Noranda special committee of directors is acting on behalf of all shareholders of Noranda. Just curious if you could give us any color and commentary, no competitive issues, just in relation to Brascan disposing of their interest in Noranda by themselves and really disregarding the special committee's directions or instructions at any point in time. Or their view.

Andrew, I guess the only comment I will make -- and I don't want to get into too much detail on it. But with respect to our shares, we hold all rights we have with respect to the securities we own in the company subject to security regulations in Canada. Which are widely known by most people, so we can act in the interest of Brascan. I guess we're part of a special committee at the Board of Noranda and that committee is working on behalf of all shareholders to consider the options for the company. At this point in time, there probably isn't anything more that we should say about that.

Okay. If we could switch gears then and really look at the power of operations. You made some commentary just about what you've locked in on the -- or prospectively locked in on the Reliant assets. Could you give us some color on pricing?

Sure. We've been able to lock in pricing. If you look at where the market is right now, it is around -- anywhere from $47 up through, say, 50 some odd dollars. If you step out a bit. And really talking about over the next 1 to 3 years. So really it is in that range that we've been able to lock power in.

Okay. You haven't seen any material increase just because of the fall through prices we're seeing right now?

I guess I -- the bottom line right now with the prices high in the marketplace, we are able to, in a very short period of time, lock in the -- probably the riskiest point of when you do an acquisition, which is your immediate cash flows coming into the Company. And we're able to take a lot of the risk out of the transaction in the next short while.

Okay. If I may, just one final question, just as it relates to Canary Wharf. If you could just give us a bit of an outlook on the timing behind the legislation passing of the U.K. for allowing REITs and then just the potential transfer of that vehicle into a REIT.

As you know, we don't control the agenda at Canary Wharf today. We're a group of us and some other shareholders own 33% of the company. And a Morgan Stanley group owns 67%. They would control whether this company -- what happens in the company and where it goes in the future. So whether it gets converted or not, really is their agenda. And we'd have to go along with that. Because we don't have control of the company at this point in time. With respect to the actual legislation, there's been a number of papers put out in the U.K. about allowing the U.K. capital markets to utilize something like the U.S. REIT structure that has been adopted in a number of other countries in the world. And it is still at a preliminary stage. But it is rumored to be in the next couple of years that that legislation may get introduced and adopted in the U.K. And we think for real estate that will be a positive thing.

Okay. That's great. Thank you very much.

You're welcome.

Your next questions comes from Rossa O'Riley.

Thanks very much. Actually, furthering to the Canary Wharf question, I wonder, will you continue to account for that on a book-cost basis?

Yes.

And so the only contribution to income would be any dividends that might come in the future?

That's correct.

And then I guess for valuation purposes, will you continue to use the offer price?

Well, certainly in the near term, that's what we propose to do, Rossa, and then what we will do is review information published by the company and any future net asset value calculations that they do themselves, which as you know is common practice with UK property companies.

And do you have any influence on the Morgan Stanley group in terms of meetings or prospects for going on any Boards?

Rossa, maybe the comment -- it's Bruce. Maybe the comment I would make is, really, their bid only closed in the last month. And all of this just happened in the last short while. And obviously with this type of investment, we and other shareholders own 1/3 of the company. And we'll be sitting down with the other shareholders of the company to ensure that we can see, you know to maximize value in the investment we have. And right now, we as Brascan don't have any representatives on the Board as it sits today and we'll have to see in the future whether that's appropriate or not.

Would discussion of operating relationships enter into that to the extent that the tenants of Canary Wharf are the same kinds of tenant, multinational tenants that Brookfield has in North America?

I guess the comment I would make is Morgan Stanley are extremely sophisticated real estate investors. We feel very comforted that they are in charge of this investment, because we think they will make us a lot of money and our other partners. If they think that we can contribute to it, they may decide to work with us. And we think we can contribute. But we'll have to see as it sorts out over the next 12 months.

On a global basis, are there other countries where real estate markets could be of interest for investments of this kind?

Rossa, I would say -- maybe I would make 2 comments. One, we still are -- in the U.K. we're looking at other things, because we do have a presence there. And we're in the process of looking at other things and we think there may be opportunities there. We're very comfortable with the market, the laws and operating there. With us, it takes a while to get comfortable with a market. And from time to time we will look at things. And right now we don't have any other market to identify.

But the U.K. could be an area of additional future investment?

In fact, it probably will be an area of future investment, in other things other than just our investment in Canary Wharf.

That would be, I guess, London specifically?

That's correct. When you get down to it, what we have identified -- and in fact over time have, I think, worked on a method to create value in those type of assets, what we like is markets which are generally supply constrained and good demand fundamentals going forward in the office business. And London, in addition to some of the North American cities that we're invested in, fits right into that area. So we think over time there will be other opportunities to invest there.

Finally, on another geographic front, Brazil, are there any thoughts of restructuring interests there or doing anything different on the Brazilian front?

You know, at the current time, there is nothing contemplated. In fact, the operations are doing quite well. The capital, it's interesting, the capital markets in Brazil have been very strong. And there's been a number of equity raises. And there has started to be significant capital flow into the country. So that's just an interesting comment on Brazil as a market to invest in. But we don't plan on anything in the immediate term.

Thanks very much.

You're welcome.

Your next question comes from Horris Hueniken. Please go ahead.

Yes, good afternoon. I have 2 questions. The first relates to your residential home business, presumably Brookfield Homes. It is mentioned in your press release that your book sales total close to 100% of your planned sales for 2004, which seems like a nice problem to have in one sense. My question to you is what do you do now, take the rest of the year off?

That's a good question, Horris. In fact, there is 2 parts to the business, one in sales, in fact I like our construction guys to hear you say that. Really there's the selling part of the business and then the delivery of the sales. And we have a big job for the balance of the year to deliver the homes on time and to the customers to make sure we close those sales. That's really the second part of it. Which, you know, is obviously an important part. The answer to the first question is, you know, to complete that process and to book the revenues that you need to build the homes. And we're on track to do that and shouldn't have any problems. But it is a lot of work.

As to the selling side, in fact, because of the backlogs in these markets are so strong, what you're doing is forward selling homes into next year. So we're now forward selling homes into the first quarter of 2005, which normally happens in the end of the third quarter and in the fourth quarter, but given the strong markets across North America that is happening today, 6 to 9 months out.

Okay. Have you set any form of a budget for next year, 2005? Or not at this stage? I'm just trying to get a sense of -- we're reading a lot about the housing market potentially cooling off. And I'm just wondering how Brookfield Homes is managing that?

I would make a general comment. First, to directly answer your question, we don't have a budget for next year. You know, we obviously will review that. We have our own internal budgets. But we don't have anything that is publicly disclosed.

Fair enough.

With respect to just the general industry, the industry shows no signs and the sales show no real signs of slowing down across North America. In some places, you've seen it somewhat. But sales are very strong. And in fact, the indications of backlog, selling into 2005 means that the first part of next year will be very strong by probably all of the, if not most of the home builders in the United States especially. So it looks like it will go on for a while. And certainly 2004, most of the companies, public home building companies would be in the same situation as us, where they have sold most of their product for this year and they just have to build it out.

Okay. My second question relates to your comment about OPG [ph] issuing a request for proposal that you're looking at. Could you give us some sense at what type of power they are looking for and potentially what sort of dollar investment by Brascan power would be involved here?

You know, I think the actual total megawatts they're looking for is 2,500 megawatts, if I'm not correct on the conventional side. There's another 300 megawatts of wind power. So there's 2 actually RFP's that have been put out. And, obviously there will be a number of people that submit into them. We have a wind power joint venture and we'll probably submit on the RFP side of that and we also may submit on the RFP and the conventional power.

I guess I'm just trying to get a sense of, could this be a very substantial investment? Or is it hard to tell?

I would say it is hard to tell. It could be -- it will be incremental -- if we do it, it will be obviously done where we think it will be positive for the numbers. And it could be -- call it $500 million on our behalf if you wanted a number, but it's too early to tell.

Okay. Final comment -- or question rather. On your Reliant energy purchase, you mentioned you're hoping to close in about a month. What still needs to happen in order to get that thing? Are you waiting for the regulator? Or is it just the lawyers? Could you just give me a sense? I'm trying to ascertain the risk profile?

I think it is probably down to just some approvals from the regulators in the United States, which we don't foresee any issues with.

Okay. Thank you. That's all for me.

You're welcome.

Your next question comes from Michael Goldberg. Please go ahead.

Thanks a lot. I had a few questions. First of all, Bruce, you indicated that you are -- you plan to assist your partners in creating value in Canary Wharf. What do you think that you can do as a minority shareholder to create value in this investment?

The bottom line, I guess, any investment we have, we like to look at it constructively. If we can help them deliver tenancies into the estate, it's obviously going to be good for us and them. And we have a big tendancy platform in the U.S. And a lot of those same tenants are in Canary Wharf, and we think we can probably help assist with that. And, therefore, we'll try to be constructive in all of those things.

Are there other things that you would have under consideration? As you said to assist your partners to create value in your investment in Canary Wharf. Other things that perhaps just relate to the shares that you and your partners, you know, the other minority shareholders own in Canary Wharf?

I wasn't referring to that, Michael. So I think I'll just -- there's really nothing I can make a comment on that.

Okay. So it wasn't really in reference to that?

No.

Okay. Also, can you give us some color on the growth of your fund management NOI, in particular that portion that's been generated by the 4 funds that you highlight and in structured products.

Sure, Michael. We do detail some of that in our supplemental which you may have seen off of our website.

Seen it.

Really, a lot of the growth has come, for example, on the bridge lending side where we increased the amount of capital that we have deployed there, and of course, we did launch the bridge fund with our partners midway during last year. So we've seen very good deal flow there, I looked at $1 billion plus of opportunities there and we've put out a number of proposals. We had a number of them accepted and we're working on a number of other ones. So we're looking for continued growth there. On the real estate finance fund, that, again, has been I'd say a very strong success. A lot of deal flow. The actual amount of capital that we ourselves have deployed in it would actually have not increased as much given that we did the fundraiser of $560 million. So we actually are roughly a 1/3 participant in that fund. Whereas when we launch it, we were providing 100% of the capital. Having said that, with the deal flow that our team there is seeing and their ability to execute, we would expect to see them ramp up significantly. So, again, there is an area we would see more growth from.

The real estate opportunity fund, I made a couple of comments on there. In terms of just the values they've been seeing in the marketplace, haven't necessarily fallen in line with what their objectives are. They've come close on a number of occasions, but have not been successful. And they have closed 1 initiative in particular. Having said that, it is a very capable group of people. Strong execution skills, and they've got obviously good access to capital. And so we would expect them to land some good transactions over the next period of time. Does that help?

And structured products?

Structured products, again, with good results there on the reinsurance side, they had a strong quarter. Increased the contribution by a meaningful amount. In the investment funds, I think what you's see a little bit of a decline over the same quarter last year, which you may recall we had exceptional performance on the high-yield fund side. I think our return on our capital there was something in the order of 61%. We did take some money off the table there in the process of realizing on those gains, and as a result, haven't had the same kind of performance thus far this year.

Okay. My next one, you indicated a likelihood of bulk lot sale later this year. Can you give us some idea of how big that could be and the range a potential contribution?

No. I really couldn't do that.

They are pretty varied, Michael, and I guess sometimes they come along and sometimes they don't. And sometimes we decide to take lots that we might otherwise -- really we look at each lot that we have in our inventory. When we convert it into lots, we either sell it to our home building business and they build it out. Or we sell it to someone else and it is all based off of a cost benefit analysis and it all comes down to that.

Okay. Thanks very much.

You're welcome.

Your next question comes from Terence Orslan. Please go ahead.

Thanks. I was going to follow up on the real estate issues. Supply-constrained markets, let's say Washington and London. What is a meaningful number in your consideration to be in Washington beyond the 1.1 to make your time worthwhile. And second question, given the markets are pretty hot and warm the same as the power generation as someone asked, do you see the components change in Brascan's portfolio, like you don't want to -- do you have a cap of what percent of your portfolio you want to have in power and how much in real estate? Thanks.

I guess I'll take those in order, and I think I got the second one. But on the first question, our belief is that size doesn't matter beyond a certain degree. But in the office building business, what you have to have is a certain platform to be able to operate effectively in a market and make sure you see all the deals and can ensure that you maximize the value out of what you have in the marketplace. Washington is possibly a little different, because it is very close to New York City. And while we have some people in Washington today, we can cover a lot of it out of New York City, because it is a relatively close -- in close proximity to New York. But the bottom line is, to be the best in that market, we probably have to add a few million more square feet to have a presence which we can maximize the value. And we've identified it as a good market, over time we'll add other buildings. If we don't add them in the short while, it's because we will have had to pay too much money for them, but at least we've got started.

Okay.

And we'll see where we go. As to specific numbers or parameters for the percentage of dollars in each area within the Company, we've not set any. I guess we've -- what we've really tried to do is set out to shareholders 2 things. One that we'll invest within the areas which we have core expertise in. And 2, that we'll do it on a value basis when it makes sense for the Company. We don't generally like to set parameters as to how much we'll have in each area, because inevitably what you'll do is just buy those assets and fill up your percentage, and usually that brings you to deals which you may not have wanted to do. So we really don't have any percentages. And for the time being, because we've seen a number of -- we have seen and we think we will see a number of power opportunities, that percentage will probably increase on the balance sheet more than we might have expected 18 months ago.

Just on the Ontario [inaudible], living in Quebec, it is a different environment here than Ontario, you appreciate the Ontario problems, but the opportunities in Ontario could be also limited given the environmental issues. Do you see any partnership with other companies the way the nuclear reactors are going by? Everybody can have a bigger presence instead of being just everything on your own?

Yeah, I guess, we're a -- we're a niche player in the business, I guess, we've not tried to be the biggest in the power business. And in fact that's why we've never gone to gas plants which is where you -- most of the Company's added significant capacity, what we wanted was the lowest cost, highest quality assets and we've stayed disciplined and continued to buy hydro assets and we -- there may be times when it makes sense for us to be partners with others, just like we have done in the real estate business. For the time being, we've largely been doing things on our own, although we do have a partnership with a couple of companies to look at an acquisition in the New England market. So it will be acquisition by acquisition.

Okay. Last question is on Noranda. The investment portfolio of Brascan, the biggest component of gain is in Noranda, by a significant margin, obviously, so I think a lot of people are watching the opportunities that Brascan will be able to capitalize on. But a look at your approach on Norbord and Frazier. I mean the same argument can be made for Noranda whereby there are a lot of components on Noranda that they don't have to be together. The question is -- the question really is, if you [inaudible] with an offer then what is the options for Brascan to consider?

You know, I don't think I should make any comment with respect to Noranda and what it will do. There is obviously a special committee which shareholders know about that's acting on behalf of Noranda. And we're just a shareholder of the company and we probably shouldn't make any comments to override what they are going to do in the future.

But if you are different because your book value is different than the average shareholder. That's the difference between you and the other shareholders.

Yeah. I don't know, I'm sure there's lots of shareholders with prices that may be higher than ours and some that may be lower. So the bottom line is, there isn't anything I can say today. I would be happy to, once this is all over, have a call with investors and tell them all of our views about it. But at the current time, I don't think it is appropriate for me to talk about Noranda.

Thank you very much for your time.

You're welcome.

Your final question comes from Shant Poladian. Please go ahead.

Thanks. Good afternoon. I just have 2 questions on your normal course assure bid. The first one just relates to the review process taken by Noranda special committee. Would this preclude you in any way from acting on your stock buyback. Would you be subject to any blackout periods?

Yes, we wouldn't be buying stock at the current time.

Okay. And the last question, just in terms of your comments on continuing to buy the stock below your estimate of underlying value, I guess given the potential there to redeploy capital from some of the undercontributing assets, would you also consider buying stock back above your current estimates?

Shant, maybe I'll take that one. It's Bruce. And I guess we look at the -- we look at our issuer bid like we're investing capital into the assets which we already have today. So we measure those -- we really measure the fact whether we should be buying stock against all the alternatives, which is either giving it back to the shareholders in the form of cash, buying back shares or putting it in new opportunities we can find. And I guess we'll continue to look at those as we go along.

Okay. Thanks very much.

There are no further questions in the queue.

Thank you very much for everyone joining us today. And if there are further questions, as in past, we're available by phone. And we'd be happy to answer anyone's questions. With that, we'll turn it back to the operator and end the call.

This does conclude our conference call for today. Thank you for your participation and please disconnect your lines.