UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2004
DUNDEE BANCORP INC. |
(Translation of registrant's name into English) |
40 King Street West, Scotia Plaza, Suite 5500, Toronto, Ontario, Canada M5H 4A9 |
(Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-Fo Form 40-F x
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yeso Nox
Index to Exhibits |
News Release dated March 30, 2004 |
News Release dated April 2, 2004 |
..
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| DUNDEE BANCORP INC. |
(Registrant) | ||
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Date: April 7, 2004 |
| By: /s/ Lori E. Beak |
Lori E. Beak | ||
DUNDEE BANCORP RENEWS ITS NORMAL COURSE ISSUER BID
FOR IMMEDIATE RELEASE
March 30, 2004 – Dundee Bancorp Inc.(DBC.A – TSX) today announced that purchases of a maximum of 1,209,969 of its class A subordinate voting shares (“Subordinate Voting Shares”), representing approximately 5% of the 24,199,378 issued and outstanding Subordinate Voting Shares on the date hereof, by means of a normal course issuer bid through the facilities of The Toronto Stock Exchange (“TSX”), will commence on April 1, 2004 and will terminate no later than March 31, 2005. The purchases will be made in accordance with the Policies and rules of the TSX. The price paid for any Subordinate Voting Shares acquired will be the market price at the time of purchase and all Subordinate Voting Shares purchased under the bid will be cancelled.
Dundee Bancorp purchased an aggregate of 292,044 Subordinate Voting Shares at an average price of $15.09 per share through the facilities of the TSX under a normal course issuer bid which commenced on April 1, 2003 and will expire March 31, 2004.
Dundee believes that the purchase of its Subordinate Voting Shares at current market values represents a good long-term investment for the Company.
For further information please contact:
Lori E. Beak
Corporate Secretary
(416) 365-5165
A copy of the Notice may be obtained upon request from the Secretary of the Corporation, without charge.
DUNDEE BANCORP INC. REPORTS 2003 RESULTS
Toronto – April 2, 2004:DUNDEE BANCORP INC. (TSX: DBC.A)(the “Company” or “Dundee Bancorp”) announces its financial results for the fourth quarter of 2003 and year ended December 31, 2003. Reported net earnings for the year 2003 are significantly higher, at $120.9 million or $4.79 per share as compared to $50.3 million or $1.98 per share in 2002. Earnings in both years included substantial dilution gains - $32.7 million in 2003 and $75.7 million in 2002. The 2003 results include an extraordinary gain of $20.0 million which results from the accounting for “negative goodwill” related to an acquisition during the year. Earnings without these results amount to $68.2 million in 2003 as compared to a loss of $25.5 million in 2002.
On December 30, 2003, our subsidiary Dundee Wealth Management Inc. (“Dundee Wealth”) completed the acquisition of Cartier Partners Financial Group Inc. (“Cartier”) which transformed Dundee Wealth into one of the largest independent integrated wealth management companies in Canada. On a combined basis Dundee Wealth now has over $40 billion in fee paying assets under administration and management with approximately 3,300 financial advisors in over 900 offices across Canada.
Because it was only acquired on December 30, 2003, the operations of Cartier are not included in the outstanding results that Dundee Wealth was able to achieve during 2003. Dundee Wealth generated EBITDA1 of $99 million in 2003, up from $53 million in 2002. The increase is due to average fee generating AUM2 and AUA2 increasing by over 22% during the year, ending the year (without Cartier) at $21.2 billion, and performance fees earned growing from $7.4 million in 2002 to $28.9 million in 2003.
To complete the Cartier acquisition, Dundee Wealth raised $190 million in December 2003 by raising equity. The public subscribed for $100 million and Dundee Bancorp took down $90 million. The equity issue to the public diluted Dundee Bancorp’s interest in Dundee Wealth from 84% to 68%, and resulted in the creation of a dilution gain of $32.7 million for 2003.
During 2003, net realized investment gains of $39.1 million were earned as compared to $6.3 million in 2002. The increased gains are primarily as a result of increased market values in 2003 and the requirement to monetize some investment positions in order to subscribe for the additional equity in Dundee Wealth.
1
“EBITDA” which represents earnings before interest, taxes, depreciation and amortization. EBITDA is set out in the consolidated statements of operations of Dundee Bancorp and is a non-GAAP earnings measure. The Company uses this measure as a supplement for net earnings and cash flows.
2
“AUA” or “Assets under Administration” which represent the market value of client assets administered in respect of which the Company earns commissions, trailer fees and administrative and other similar fees. To the extent that AUA are managed by the Company, such assets may also be included in their respective AUM. “AUM” or “Assets under Management” which represent the market value of client assets managed by the Company on a discretionary basis in respect of which the Company earns an investment management fee.
| ____________________________ DUNDEE BANCORP INC. | 1 |
Because of the acquisition of that part of Dundee Realty Corporation (“Dundee Realty”) not previously owned as of June 30, 2003, that company is now consolidated into our financial statements. Our 2003 results includes pre-tax operating earnings of $14.8 million in land and housing activities for the first time. The accounting for our purchase whereby we achieved an 85% interest in the company was by a “step purchase” equation and a plan of arrangement. Generally accepted accounting principles (“GAAP”) requires the allocation of the cost of the purchase to each of the assets and liabilities acquired based on estimated fair values. The amounts that have been estimated and assumed are in excess of our historical cost of purchase. That excess “negative goodwill” must be allocated against the long term assets, with an excess amount of $20.0 million booke d as an extraordinary gain.
SEGMENTED OPERATINGRESULTS | |||||||||||||||||||||
| For the year ended December 31, 2003 compared with the year ended December 31, 2002 | |||||||||||||||||||||
(in thousands of Canadian dollars) | 2003 | ||||||||||||||||||||
Wealth Management |
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| Corporate and Investment Portfolio |
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Oil and Gas Activities |
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| International |
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| Real Estate |
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| Intersegment |
| TOTAL | |||||||
| REVENUES | |||||||||||||||||||||
| Management and administration fees | $ | 191,543 | $ | - | $ | 3,677 | $ | - | $ | - | $ | - | $ | 195,220 | |||||||
| Redemption fees | 10,515 | - | - | - | - | - | 10,515 | ||||||||||||||
| Financial services | 147,152 | 5,843 | 470 | - | - | (4,816) | 148,649 | ||||||||||||||
| Real estate revenue | - | - | - | - | 77,761 | - | 77,761 | ||||||||||||||
| Oil and gas sales, net of royalties | - | - | - | 11,360 | - | - | 11,360 | ||||||||||||||
| Investment income (loss) | 1,125 | 46,744 | (889) | (1,233) | - | (1,202) | 44,545 | ||||||||||||||
| 350,335 | 52,587 | 3,258 | 10,127 | 77,761 | (6,018) | 488,050 | |||||||||||||||
| EXPENSES | |||||||||||||||||||||
| Selling, general and administrative | 136,050 | 11,044 | 4,832 | 1,576 | 2,311 | (3,366) | 152,447 | ||||||||||||||
| Variable compensation | 82,144 | - | - | - | - | - | 82,144 | ||||||||||||||
| Trailer fees | 33,448 | - | - | - | - | - | 33,448 | ||||||||||||||
| Operating costs, real estate | - | - | - | - | 58,990 | - | 58,990 | ||||||||||||||
| Operating costs, oil and gas properties | - | - | - | 4,452 | - | - | 4,452 | ||||||||||||||
| 251,642 | 11,044 | 4,832 | 6,028 | 61,301 | (3,366) | 331,481 | |||||||||||||||
| OPERATING EBITDA | 98,693 | 41,543 | (1,574) | 4,099 | 16,460 | (2,652) | 156,569 | ||||||||||||||
| Amortization of deferred sales commissions | 42,404 | - | - | - | - | - | 42,404 | ||||||||||||||
| Depreciation and amortization | 5,057 | 1,059 | 122 | 2,234 | 1,067 | - | 9,539 | ||||||||||||||
| Interest expense | 5,211 | 12,771 | 14 | 33 | 554 | (2,652) | 15,931 | ||||||||||||||
| OPERATING EARNINGS (LOSS) | $ | 46,021 | $ | 27,713 | $ | (1,710) | $ | 1,832 | $ | 14,839 | $ | - | 88,695 | ||||||||
| Equity earnings | 8,926 | ||||||||||||||||||||
| Investment provision | (4,655) | ||||||||||||||||||||
| Dilution gain | 32,700 | ||||||||||||||||||||
| Income taxes | (16,242) | ||||||||||||||||||||
| Non controlling interest | (8,465) | ||||||||||||||||||||
| Extraordinary gain | 19,951 | ||||||||||||||||||||
| NET EARNINGS FOR THE YEAR | $ | 120,910 | |||||||||||||||||||
| ____________________________ DUNDEE BANCORP INC. | 2 |
| (in thousands of Canadian dollars) | 2002 | ||||||||||||||||||||
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Wealth Management |
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| Corporate and Investment Portfolio |
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Oil and Gas Activities |
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| International |
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| Real Estate |
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| Intersegment |
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| TOTAL |
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| REVENUES | |||||||||||||||||||||
| Management and administration fees | $ | 127,736 | $ | - | $ | 2,724 | $ | - | $ | - | $ | - | $ | 130,460 | |||||||
| Redemption fees | 9,867 | 543 | - | - | - | - | 10,410 | ||||||||||||||
| Financial services | 124,543 | 4,730 | 444 | - | - | (4,730) | 124,987 | ||||||||||||||
| Real estate revenue | - | - | - | - | - | - | - | ||||||||||||||
| Oil and gas sales, net of royalties | - | - | - | 6,896 | - | - | 6,896 | ||||||||||||||
| Investment income (loss) | 4,702 | 1,826 | (18) | 4,808 | - | (376) | 10,942 | ||||||||||||||
| 266,848 | 7,099 | 3,150 | 11,704 | - | (5,106) | 283,695 | |||||||||||||||
| EXPENSES | |||||||||||||||||||||
| Selling, general and administrative | 118,599 | 5,726 | 4,491 | 1,472 | - | (4,730) | 125,558 | ||||||||||||||
| Variable compensation | 71,307 | - | - | - | - | - | 71,307 | ||||||||||||||
| Trailer fees | 22,973 | - | - | - | - | - | 22,973 | ||||||||||||||
| Operating costs, real estate | - | - | - | - | - | - | - | ||||||||||||||
| Operating costs, oil and gas properties | - | - | - | 2,037 | - | - | 2,037 | ||||||||||||||
| 212,879 | 5,726 | 4,491 | 3,509 | - | (4,730) | 221,875 | |||||||||||||||
| OPERATING EBITDA | 53,969 | 1,373 | (1,341) | 8,195 | - | (376) | 61,820 | ||||||||||||||
| Amortization of deferred sales commissions | 34,571 | - | - | - | - | - | 34,571 | ||||||||||||||
| Depreciation and amortization | 6,122 | 786 | 108 | 1,893 | - | - | 8,909 | ||||||||||||||
| Interest expense | 2,858 | 11,486 | 39 | 44 | - | (376) | 14,051 | ||||||||||||||
| OPERATING EARNINGS (LOSS) | $ | 10,418 | $ | (10,899) | $ | (1,488) | $ | 6,258 | $ | - | $ | - | 4,289 | ||||||||
| Equity earnings | 2,252 | ||||||||||||||||||||
| Investment provision | (9,265) | ||||||||||||||||||||
| Dilution gain | 75,680 | ||||||||||||||||||||
| Income taxes | (7,448) | ||||||||||||||||||||
| Non controlling interest | (15,252) | ||||||||||||||||||||
| NET EARNINGS FOR THE YEAR | $ | 50,256 | |||||||||||||||||||
THE WEALTH MANAGEMENT DIVISION
Revenues in the wealth management segment grew over 30% from $266.8 million in 2002 to $350.3 million in 2003. Contributing to this increase are the following significant factors:
Average AUM increased from $7.0 billion to $9.2 billion year-over-year, with AUM ending the year at $11.0 billion (without Cartier).
Reflecting the above average investment performance of Dundee Wealth’s client mutual and other funds, performance fee revenues, before associated expenses, totaled $28.9 million in 2003, substantially above the $7.4 million earned in 2002.
Financial services revenues increased by $22.6 million, reflecting overall increases in all operating areas including greater commission levels, higher activity in corporate finance and additional trading profits.
Total expenses of the wealth management division, before amortization and interest charges, increased by $38.8 million to $251.6 million.
Selling, general and administrative expenses increased from $118.6 million to $136.1 million. Included in this increase is approximately $6 million in variable compensation costs relating to higher performance fee revenues and other criteria as well as over $4 million in sub-advisory fee arrangements, most of which were inherited on acquisitions completed in 2002. Increases in other variable compensation costs from $71.3 million to $82.1 million and in trailer fee expense from $23.0 million to $33.4 million are consistent with increases in financial services revenues and AUM, respectively.
Amortization of deferred sales commissions was $42.4 million in 2003 (2002 - $34.6 million). Business acquisitions completed in 2002 added $32.7 million to the deferred commission pool, accounting for most of the resulting increase in amortization expense. Commissions are deferred for
| ____________________________ DUNDEE BANCORP INC. | 3 |
accounting purposes and amortized over a five-year period. At December 31, 2003, the carrying value of the deferred commission pool was $85 million. The Company estimates that the contingent redemption fees receivable if all assets sold on a deferred sales charge basis were redeemed on December 31, 2003 would be $156 million.
THE REAL ESTATE DIVISION
Prior to the June 30, 2003 plan of arrangement, we owned approximately 45% of Dundee Realty (which was then initially reduced to 43% at the time of the arrangement due to share issuances). Following the arrangement, the Company’s interest has been divided into two components: its continuing interest in the assets that are now part of Dundee REIT, which was reduced from 45% to 42% at the time of the arrangement due to share issuances, and which continues to be accounted for on an equity basis in theCorporate and Investment Portfolio Segment; and the Company’s controlling interest in the remaining operations of Dundee Realty, which was increased to 85% by acquiring additional shares. Since June 30, 2003, Dundee Realty is required to be reported on a consolidated basis.
Earnings for 2003 include $11.6 million related to this excess, $0.2 million relating to amortization, $7.6 millionrelating to revenue properties sold and $3.8 million relating to land inventory sold in 2003 the values of which were reduced by negative goodwill in respect of our historic purchase price discrepancies. Although the $7.6 million related to revenue properties that were actually sold in the third quarter, this amount along with the associated taxes has been reported in the fourth quarter which reflects the time at which the purchase price allocation was finalized.
REVIEW OF THE FOURTH QUARTER OF 2003
Net earnings for the fourth quarter of 2003 were $79.0 million, or $3.14 per share, including the extraordinary gain of $20.0 million. This is an increase of $74.0 million from earnings in the third quarter of 2003.
Revenues in the fourth quarter of 2003 were $183.6 million, an increase of 48% over revenue levels of $123.7 million in the third quarter. Significant components of this increase are:
Management and administration fees increased 73% from $42.5 million to $73.6 million in the fourth quarter due to performance fees earned in the wealth management division.
Investment income was $12.6 million compared to $8.6 million in the third quarter as a result of sales of portfolio investments.
Revenues from real estate operations increased by $17.9 million, of which $7.6 million was actually earned in the third quarter but was not capable of being reported at that time.
Other expenses, excluding expenses of real estate and oil and gas properties, increased from $68.2 million to $84.8 million in the fourth quarter of 2003. Approximately $12 million is attributable to increases in the wealth management division and relate to the public issue of subscription receipts, increased financial services activity and the acquisition of Cartier. The corporate division incurred higher costs in respect of its acquisition of Dundee Realty’s land and housing business.
Interest and amortization during the fourth quarter remained constant at about $18 million.
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| ____________________________ DUNDEE BANCORP INC. | 4 |
Cash flows from operating activities before accounting for changes in working capital were $31.3 million compared with $6.6 million in the previous quarter, reflecting increased profitability.
As at December 31, 2003, there were 24,106,378 Class A subordinate voting shares and 1,049,193 Class B common shares outstanding. During 2003, the Company issued 141,018 subordinate shares and added $1,718,000 to its stated capital as part of its Share Incentive Plan. In addition, the Company issued 58,866 deferred share units to employees of the Company, each unit entitling the holder to a common share of Dundee Bancorp on retirement. The Company recognized share based compensation expense of $1.0 million in respect of these units. During 2003, the Company purchased 314,301 subordinate shares for cancellation pursuant to its normal course issuer bid at an aggregate cost of $4.7 million or approximately $14.94 per share.
FORWARD LOOKING STATEMENTS
This release may contain forward looking statements about the Company, including its business operations, strategy and expected financial performance and conditions. Forward looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” or similar expressions. Such statements are based on the current expectations of management, and inherently involve numerous risks and uncertainties, known and unknown, including economic factors and the financial services industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward looking statements made by the Com pany. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward looking statements. The Company has no specific intention to update any forward looking statements whether as a result of new information, future events or otherwise.
A review of activities and performance for the Company, together with audited consolidated financial statements and a Management’s Discussion and Analysis, will be published in the Company’s 2003 Annual Report which should be mailed to shareholders on or about May 10, 2004. Readers are referred to the media release of Dundee Wealth Management Inc. dated April 2, 2004 for more information on that company.
For further information please contact:
Ned Goodman
Joanne Ferstman
President & CEO
Executive Vice President & CFO
Tel: (416) 365-5665
Tel: (416) 365-5010
ngoodman@dundeebancorp.com
jferstman@dundeebancorp.com
| ____________________________ DUNDEE BANCORP INC. | 5 |
D UN D E E B A N C O R P I NC.
C O N S O L I D A T E D B A L A N C E S H E E T S
| (expressed in thousands of Canadian dollars) | ||||||
| December 31, 2003 | December 31, 2002 | |||||
| ASSETS | ||||||
| Cash and short term investments | $ | 148,658 | $ | 119,467 | ||
| Brokerage securities owned | 24,978 | 12,201 | ||||
| Accounts receivable | 170,682 | 48,830 | ||||
| Client accounts receivable | 354,347 | 230,730 | ||||
| Investment portfolio | 328,153 | 428,925 | ||||
| Deferred sales commissions | 85,309 | 81,089 | ||||
| Capital and other assets | 626,103 | 295,163 | ||||
| TOTAL ASSETS | $ | 1,738,230 | $ | 1,216,405 | ||
| LIABILITIES | ||||||
| Bank indebtedness | $ | 21,181 | $ | 7,374 | ||
| Accounts payable and accrued liabilities | 186,276 | 61,977 | ||||
| Brokerage securities sold short | 3,966 | 4,845 | ||||
| Income taxes payable | 13,827 | 613 | ||||
| Client deposits and related liabilities | 336,126 | 260,711 | ||||
| Corporate debt | 295,622 | 238,628 | ||||
| Future income tax liabilities | 38,670 | 54,847 | ||||
| 895,668 | 628,995 | |||||
| NON CONTROLLING INTEREST | 245,927 | 108,444 | ||||
| SHAREHOLDERS' EQUITY | ||||||
| Share capital | ||||||
| Common shares | 288,740 | 290,727 | ||||
| Contributed surplus | 987 | - | ||||
| Retained earnings | 308,160 | 188,239 | ||||
| Foreign currency translation adjustment | (1,252) | - | ||||
| 596,635 | 478,966 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,738,230 | $ | 1,216,405 | ||
| ____________________________ DUNDEE BANCORP INC. | 6 |
D U N D E E B A N C O R P I N C.
C O N S O L I D A T E D S T A T E M E N T S O F O P E R A T I O N S
For the years ended December 31, 2003 and 2002 |
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(expressed in thousands of Canadian dollars, except per share amounts) |
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| Twelve Months |
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| 2003 |
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| 2002 |
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| 2003 |
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| 2002 |
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REVENUES |
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| Management and administration fees | $ | 73,558 | $ | 43,647 | $ | 195,220 | $ | 130,460 | |||||
Redemption fees |
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| 2,477 |
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| 3,656 |
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| 10,515 |
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| 10,410 |
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| Financial services | 44,923 | 32,202 | 148,649 | 124,987 | |||||||||
| Real estate revenue | 47,845 | - | 77,761 | - | |||||||||
Oil and gas sales, net of royalties |
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| 2,157 |
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| 2,220 |
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| 11,360 |
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| 6,896 |
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| 170,960 |
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| 81,725 |
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| 443,505 |
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| 272,753 |
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| Investment income | 12,593 | 6,391 | 44,545 | 10,942 | |||||||||
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| 183,553 |
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| 88,116 |
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| 488,050 |
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| 283,695 |
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EXPENSES |
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| Selling, general and administrative | 51,137 | 36,796 | 152,447 | 125,558 | |||||||||
| Variable compensation | 23,841 | 17,575 | 82,144 | 71,307 | |||||||||
Trailer fees |
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| 9,868 |
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| 7,756 |
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| 33,448 |
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| 22,973 |
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| Operating costs, real estate | 30,351 | - | 58,990 | - | |||||||||
Operating costs, oil and gas properties |
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| 436 |
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| 573 |
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| 4,452 |
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| 2,037 |
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| 115,633 |
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| 62,700 |
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| 331,481 |
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| 221,875 |
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OPERATING EARNINGS BEFORE INTEREST, |
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TAXES AND OTHER NON CASH ITEMS |
| 67,920 |
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| 25,416 |
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| 156,569 |
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| 61,820 |
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| Amortization of deferred sales commissions | 10,719 | 11,430 | 42,404 | 34,571 | |||||||||
Depreciation, depletion and amortization |
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| 2,769 |
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| 2,496 |
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| 9,539 |
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| 8,909 |
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Interest expense |
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| 4,453 |
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| 4,266 |
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| 15,931 |
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| 14,051 |
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OPERATING EARNINGS |
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| 49,979 |
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| 7,224 |
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| 88,695 |
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| 4,289 |
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Share of earnings (losses) of equity accounted investees |
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| (1,332) |
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| (4,646) |
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| 8,926 |
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| 2,252 |
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Increase in investment provision to reflect |
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decreases in value of investments |
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| (4,655) |
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| (5,292) |
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| (4,655) |
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| (9,265) |
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| Dilution gain | 34,012 | 75,680 | 32,700 | 75,680 | |||||||||
Income taxes |
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Current |
| (15,634) |
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| (1,989) |
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| (19,335) |
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| (10,861) |
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Future |
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| 1,626 |
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| (3,481) |
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| 3,093 |
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| 3,413 |
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Non controlling interest |
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| (4,993) |
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| (15,407) |
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| (8,465) |
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| (15,252) |
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NET EARNINGS BEFORE EXTRAORDINARY ITEM |
| 59,003 |
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| 52,089 |
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| 100,959 |
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| 50,256 |
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| Extraordinary gain | 19,951 | - | 19,951 | - | |||||||||
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NET EARNINGS | $ | 78,954 |
| $ | 52,089 |
| $ | 120,910 |
| $ | 50,256 |
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EARNINGS PER SHARE |
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Basic earnings per share |
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|
|
|
|
|
|
|
Earnings before extraordinary gain | $ |
| 2.35 |
| $ | 2.06 |
| $ | 4.00 |
| $ | 1.98 |
|
Net earnings | $ |
| 3.14 |
| $ | 2.06 |
| $ | 4.79 |
| $ | 1.98 |
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before extraordinary gain | $ |
| 2.30 |
| $ | 2.05 |
| $ | 3.96 |
| $ | 1.96 |
|
Net earnings | $ |
| 3.07 |
| $ | 2.05 |
| $ | 4.75 |
| $ | 1.96 |
|
| ____________________________ DUNDEE BANCORP INC. | 7 |
D U N D E E B A N C O R P I N C.
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W S
| For the years ended December 31, 2003 and 2002 | ||||||||||||
| (expressed in thousands of Canadian dollars) | ||||||||||||
Three Months | Twelve Months | |||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net earnings | $ | 59,003 | $ | 52,089 | $ | 100,959 | $ | 50,256 | ||||
| Non cash items in earnings: | ||||||||||||
| Depreciation, depletion and amortization | 13,488 | 13,926 | 51,943 | 43,480 | ||||||||
| Net investment (gains) losses - investment portfolio | (10,506) | 3,876 | (39,101) | 2,653 | ||||||||
| Net investment gains - real estate operations | (7,758) | - | (7,758) | - | ||||||||
| Share of unremitted equity (earnings) losses | 1,332 | 4,646 | (8,926) | (2,252) | ||||||||
| Dilution gain realized on reorganization | (34,012) | (75,680) | (32,700) | (75,680) | ||||||||
| Increase in investment provision | 4,655 | 5,292 | 4,655 | 9,265 | ||||||||
| Future income taxes | (1,626) | 3,481 | (3,093) | (3,413) | ||||||||
| Non controlling interest | 4,993 | 15,407 | 8,465 | 15,252 | ||||||||
| Other | 1,751 | (81) | 2,746 | 1,889 | ||||||||
| 31,320 | 22,956 | 77,190 | 41,450 | |||||||||
| Changes in: | ||||||||||||
| Accounts receivable | (33,173) | (8,723) | (34,944) | 1,846 | ||||||||
| Accounts payable and accrued liabilities | 30,163 | (1,221) | 33,201 | (3,190) | ||||||||
| Bank indebtedness | 16,864 | (741) | 13,807 | 7,374 | ||||||||
| Income taxes payable | 14,193 | 2,596 | 12,271 | (662) | ||||||||
| Brokerage securities inventory, net | (8,056) | 5,286 | (10,698) | 1,163 | ||||||||
| Client accounts receivable, net of deposits and related liabilities | (22,112) | 18,483 | (48,201) | (10,462) | ||||||||
| Development of land, housing and condominium inventory | (395) | - | (7,551) | - | ||||||||
| Other real estate working capital | 35 | - | 35 | - | ||||||||
| CASH PROVIDED FROM OPERATING ACTIVITIES | 28,839 | 38,636 | 35,110 | 37,519 | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Proceeds on dispositions of portfolio investments | 26,594 | (2,850) | 137,434 | 12,510 | ||||||||
| Acquisitions of portfolio investments | (4,143) | 1,112 | (20,592) | (12,779) | ||||||||
| Cash disbursed in business acquisitions | (159,145) | 11,627 | (158,167) | 915 | ||||||||
| Sales commissions paid on distribution of mutual funds | (11,635) | (6,386) | (37,654) | (26,047) | ||||||||
| Acquisitions of shares in subsidiary | - | - | (3,251) | - | ||||||||
| Acquisition of land held for development | (2,772) | - | (10,505) | - | ||||||||
| Investment in real estate revenue properties | (1,005) | - | (1,005) | - | ||||||||
| Proceeds on dispositions of real estate investments | (10,116) | - | 8,040 | - | ||||||||
| Other | (3,107) | (3,139) | (8,746) | (15,209) | ||||||||
| CASH (USED IN) PROVIDED FROM INVESTING ACTIVITIES | (165,329) | 364 | (94,446) | (40,610) | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Increase (decrease) in corporate debt | 45,789 | (1,930) | 3,224 | 1,058 | ||||||||
| Decrease in real estate debt | (7,648) | - | (7,648) | - | ||||||||
| Issuance of Class A subordinate shares, net of costs | 1,079 | 32 | 1,640 | 1,651 | ||||||||
| Acquisition of Class A subordinate shares | - | (532) | (4,694) | (12,724) | ||||||||
| Issuance of shares in subsidiaries to non controlling interest | 94,437 | 25,485 | 96,554 | 27,181 | ||||||||
| Redemption of subsidiary shares from non controlling interest | - | (12,556) | - | (12,556) | ||||||||
| Dividends paid to non controlling shareholders | (137) | (133) | (549) | (264) | ||||||||
| CASH PROVIDED FROM FINANCING ACTIVITIES | 133,520 | 10,366 | 88,527 | 4,346 | ||||||||
| NET INCREASE (DECREASE) IN CASH DURING THE PERIOD | (2,970) | 49,366 | 29,191 | 1,255 | ||||||||
| Cash, beginning of period | 151,628 | 69,884 | 119,467 | 117,995 | ||||||||
| CASH, END OF PERIOD | $ | 148,658 | $ | 119,250 | $ | 148,658 | $ | 119,250 | ||||
| Cash flows from operating activities include the following: | ||||||||||||
| Interest paid | $ | 5,379 | $ | 3,852 | $ | 16,857 | $ | 13,637 | ||||
| Taxes paid | $ | 2,690 | $ | (52) | $ | 9,757 | $ | 13,504 | ||||
| ____________________________ DUNDEE BANCORP INC. | 8 |